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1Analysts' conference 2016
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Strong track record – and new ideasAnalysts' conference 2016
Munich, 16 March 2016
2Analysts' conference 2016
Agenda
2 Strong track record – and new ideas Nikolaus von Bomhard
17 Munich Re (Group) Jörg Schneider
32 Risk management Bernhard Kaufmann
45 ERGO Markus Rieß
56 Reinsurance Property-casualty Torsten Jeworrek
76 Reinsurance Life Joachim Wenning
90 Backup
3Analysts' conference 2016
Under-promise/over-deliver – Strong balance sheet
continues to support sound earnings …
Strong track record – and new ideas
€bnDelivering on promised net result Earnings outlook 2016
1 Assuming normal nat cat claims based on 8.5% budget, net result would have exceeded guidance. 2 As at 31.12.2015.
Munich Re once again delivering strong results, despite persistent challenges
of declining reinsurance margins and low interest rates
Strong balance sheet
Challenging reinsurance
and capital markets
2.0
2.4 2.5
3.0 3.0 2.5–3.0
2.4
0.7
3.2 3.3 3.2 3.1
2010 2011 2012 2013 2014 2015
2.3–2.8
1
Guidance Actual
Munich Re’s balance sheet
Sound capitalisation
according to all metrics
High level of unrealised
investment gains2
Rock-solid
reserving position
Low goodwill in relation
to shareholders’ equity2
€26bn 9%
4Analysts' conference 2016
… while safeguarding reliable shareholder payouts
Further increase of dividend per share to €8.25 in 2016 –
Total of €20bn returned to shareholders in the last ten years
1 Cash-flow view. 2 Total payout (dividend and buy-back) divided by average market capitalisation.
Medium
Low High
HGB flexibility
Strong track record – and new ideas
AA
A AAA
Ratingagencies
Sound
capitalisation
according to
all metrics
Medium
Low High
Quality of capital
Sub-
optimal
Above
target
175%
140% 220%
Internal model
Attractive shareholder participation1
Dividend
Share
buy-back
Cash yield2 11.2% 7.8% 5.4% 6.0% 9.6% 7.7%
2.4
1.5
1.1
1.6
2.7
2.3
2010 2011 2012 2013 2014 2015
€bn
5Analysts' conference 2016
Strong track record in value generation –
Prudency reflected in lower cost of capital
Strong track record – and new ideas
10.0
2005 2007 2009 2011 2013 2015
Peer 6
Peer 3
Peer 1
Peer 4 Peer 5Peer 2
Index
–5
0
5
10
15
20
20 25 30 35 40 45
Balanced business portfolio paves the way for sustainable profitability
1 Annualised total shareholder return defined as price performance plus dividend yield over the period from 1.1.2005 until 29.2.2015; based on Datastream total return indices in local currency; volatility calculation with 250 trading days per year.Peers: Allianz, Axa, Generali, Hannover Re, Swiss Re, ZIG, Stoxx 600 Insurance (“index”).
%Risk/return profile1
Total shareholder return (p.a.)
%Return on equity
11-year average ROE: ~11.0% –
Clearly exceeds average cost of capital: ~8%
Annualised TSR: ~11.1% –
Outperforming major peers and insurance index
Volatility of total shareholder return (p.a.)
Average cost of capital
Valu
e g
en
era
tio
n
16
14
12
10
8
6
4
2
0
6Analysts' conference 2016
Global environment becoming increasingly challenging
Proactive risk management builds up resilience
in an unpredictable and unstable environment
Strong track record – and new ideas
Political risks Economic risks
Changing risks Regulatory risks
Military conflicts
Sovereign debt crisis
Brexit/Grexit
Refugees
New “cold war”
Low interest rates
Low commodity prices
Economic cooldown in China
High capital-market volatility
Solvency II
ComFrame
IFRS 4 and 9
Digitalisation
Cyber
Terror
Climate change
Cumulative
uncertainties
7Analysts' conference 2016
Economic/political risks – Munich Re has continuously
strengthened its capital position
Crisis resilience – Munich Re well-positioned to manage through volatile capital
markets, based on deeply embedded risk management and high level of discipline
Strong track record – and new ideas
Ongoing analysis of scenarios
Monitoring of emerging risks and
reaction to changed market conditions
Clearly defined risk appetite
Integrated business model with clear
focus on managing insurance risks
Group-wide strategic risk
management framework
Risks generally well captured by risk
models – binding strategic risk criteria
and operational limits embedded
Diversified investment portfolio
Hedging strategy
Reasonable credit-risk exposure
Relatively small investment share
in corporate/bank bonds
Sound rating structure
Proactive risk management … … limiting economic impact of volatile capital markets
8Analysts' conference 2016
Regulatory risks – Munich Re well-positioned for
Solvency II and business opportunities it presents
Munich Re welcomes Solvency II standards for risk-based capitalisation
Strong capital position
Certified full internal model deeply embedded
in risk and business management
Market-leader position in structuring
complex tailor-made solutions
Focus on profitable underwriting and liability-driven
investments – well-diversified risk profile clearly recognised
Extensive reporting to stakeholders
Risk-based
supervision
Insurers’ business models are
adequately reflected
Solvency II framework
Industry remains
adequately capitalised
High degree
of transparency
Business opportunities for reinsurers,
driver of product innovation
Strong track record – and new ideas
9Analysts' conference 20161 e.g. Cyber insurance, performance guarantees for renewable energies. 2 e.g. Liability risks of atomic power plants or oil platforms.3 e.g. Satellite life-time insurance.
Changing risks – Munich Re actively shaping the
transformation of the (re-)insurance industry
Efficiently running the traditional book while continuously exploring
new products/markets
Strong track record – and new ideas
Munich Re’s
strong footprint
facilitates
expansion to
attractive growth
markets
Providing services
and capacity to
(new) clients
Short-term:
Important earnings
generator
Mid-/long-term:
Declining
contribution –
compensated for
by new products
and markets
Underwriting
know-how and
expert network
key to developing
innovative
solutions
Munich Re with
the right
infrastructure
Client proximity
important for
understanding
changing demand
Munich Re
launches new
products that
meet evolving/
changing client
needs
Mark
ets
Products
Ne
wE
sta
blis
hed
Established New
Emerging
markets
Solutions for
emerging risks
New
products/
risk-related
services1Risk
Solutions
Incremental
innovations3
Tailor-made
solutions
Under-
insurance
in developed
markets2
Traditional
reinsurance
business
ILLUSTRATIVE
10Analysts' conference 2016
Future growth driven by demographic/economic changes – Munich Re is tapping
the potential with know-how, client proximity and a strong capital position
Underinsurance in emerging markets provides
business opportunities
… drive economic growth –
Higher wealth and better
education further increases
insurance spending/penetration
0
2
4
6
1 Source: United Nations, Department of Economic and Social Affairs, Population Division (2015). 2 Source: Munich Re, Economic Research. Non-life, 2014. 3 Source: Munich Re, Geo Risks Research, NatCatSERVICE. 1980–2014.
Emerging markets often highly
exposed to nat cat risks –
Higher risk awareness reduces
underinsurance
43
38
28
10
8
5
NorthAmerica
Australia
Europe
SouthAmerica
Asia
Africa
Demographic changes –
Rise of affluent middle class and
significant population growth …
2015 2030 2050
Asia/Oceania Africa Latin America
Europe North America
7.48.5
9.7
Gross national income per capita
Insured share of nat cat losses3Insurance penetration still low2Young and growing population1 %
bn Insurance penetration (%)
Strong track record – and new ideas
11Analysts' conference 2016
Munich Re well-prepared to seize opportunities and open up new profit pools
Structural transformation of the (re-)insurance
industry provides challenges and opportunities
New
techno-
logies
Changing risk landscape –
Prevention is reducing
claims frequency1, new
exposures are evolving2
Big
data
Data owners can obtain a
competitive advantage –
by improving underwriting
(risk selection) and
claims management
Digitalised
processes
Significantly
improving
operational
efficiency
Drivers of the transformation process – Digitalisation can improve claims and administration expenses
1 e.g. Smart/connected home devices, autonomous driving. 2 e.g. Cyber risks.
Breakup of the insurance value chain – New competitors, changing products/services and distribution
Strong track record – and new ideas
Specialist
Taking over sections of the
value chain
Disintermediation
New players integrate insurance
services into their product range
Disintermediation
Ve
rtic
al d
evelo
pm
ent
Horizontal development
Specialist for
part of process
Horizontal/vertical
Expansion of product range
with additional products/services
along the insurance value chain
12Analysts' conference 2016
Integrated business model and infrastructure is
facilitating swift adaption to a changing environment
Munich Re combines core competencies within the Group –
~€500m1 premium generated by innovative products
1 Munich Re (Group).
Strong track record – and new ideas
Optimising the
customer journey –
personalised
digital products
and services
Predictive and
preventive services
are being linked to
insurance products
Digital technology
allows the value
chain to be
redesigned
Adapting to
changing
purchasing
behaviour and
new client needs
Munich Re provides solutions along the entire value chain …
New (re)
insurance
products
New
business
models
New
risk-
related
services
New
clients and
demands
Exploiting potential
for digital processes –
reducing complexity
Efficient
and digital
business
processes
Digital
customer
and sales
experience
Data analytics
Data aggregation
and analysis
Cooperation
Partnership models inside and
outside the insurance industry
Agile IT
Fast, efficient
and flexible
… facilitated by our core competencies
+
Pushing out the
frontiers of insurability
with covers for pre-
viously uninsured new
and changing risks
13Analysts' conference 2016
5.1 5.8
4.7
5.3
10.5
2008 2015
Reinsurance – Portfolio mix on the move
Life – GWP1
As a leading Tier-1 reinsurer, successfully
managing cyclical and structural market changes
Active cycle and portfolio management in
traditional business …
… while continuously expanding attractive
growth areas, e.g. Risk Solutions, as well as
tailor-made and innovative products
Traditional business remains an important earnings generator, while
investment in new products/solutions safeguards future profitability
1 Gross premiums written.
14.7 13.0
1.9 5.0
16.618.0
2008 2015
Property-casualty – GWP1 €bn
RiskSolutions
Traditionalbook
Strong existing book complemented with well-
established initiatives and innovative capacity
Traditional mortality risk remains core …
… while strategic initiatives have become a
substantial part of the portfolio, mainly driven
by organic growth in Asia and financially
motivated reinsurance business
€bn
+15%
–2%
CAGR Strategic initiatives
Traditionalbusiness model
+57%
+2%
CAGR
Strong track record – and new ideas
14Analysts' conference 2016
New ERGO
ERGO – Becoming a significant earnings contributor
for Munich Re (Group)
Strengthening the groundwork while paving the way for ERGO’s future set-up
Strong track record – and new ideas
Sales force
Consequent omni-channel
approach with strong agent
force where available
Internationalisation
Defending market position
in CEE markets
Selectively expanding
business in Asian markets
Strengthening operational power
Focus on process excellence
Modular product concepts
Stronger IT platforms
Product spectrum
Stronger focus on
financial products
and MEAG synergies
Digitalisation
Uncompromising exploitation of
digital opportunities to transform
business model
Challenges
Disappointing earnings development
Insufficient success story
Weakness in traditional life business
Internationally diversified client base
Multiple product lines
Strong digital footprint
Strength
15Analysts' conference 2016
Munich Health – Business measures show first signs
of stabilisation
Agenda 2016 – Intensified attention on forward-looking strategies
and increased future-oriented initiatives
Markets/clients
Enhanced organisational
structures implemented
Improvements in underwriting
and client management
Further specified
strategic focus
Intensified Group-wide
business synergies
Growth initiatives for South-
East Asia and Middle East
Repositioning in the US
Enhanced customer experience
across Munich Health
Strengthened value proposition
for reinsurance clients
Digital health target picture
Development and
implementation of innovative
and digital health solutions
Embedding of business
analytics into processes,
decisions and value
proposition
Innovation/digitalisationOrganisation
Strong track record – and new ideas
16Analysts' conference 2016
Outlook 2016
1 By segment: Reinsurance €26–28bn, ERGO €15.5–16bn, Munich Health slightly below €5bn.
Strong track record – and new ideas
Reinsurance ERGO Munich Health
COMBINED RATIO COMBINED RATIO COMBINED RATIO
NET RESULT NET RESULTNET RESULT
~98%Germany: ~95%
International: ~99%~99%
€1.9–2.4bn €250–350m €50–100m
Munich Re (Group)
GROSS PREMIUMS WRITTEN1 NET RESULTRETURN ON INVESTMENT
Focus on bottom-line growth
prevails
RoRaC target of 15% after tax
over the cycle to stand
Solid return given ongoing low
interest-rate environment
€47–49bn ~3% €2.3–2.8bn
17Analysts' conference 2016
Agenda
Strong track record – and new ideas Nikolaus von Bomhard
Munich Re (Group) Jörg Schneider
Risk management Bernhard Kaufmann
ERGO Markus Rieß
Reinsurance Property-casualty Torsten Jeworrek
Reinsurance Life Joachim Wenning
Backup
18Analysts' conference 2016
Strong capital position according to all metrics …
… facilitates financial flexibility, including high shareholder distribution
Munich Re (Group) – Strong capitalisation
High-quality eligible own funds
Tier 2
8%Tier 1
90%
Tier 3
2%
TOTAL
€40.7bn
Solvency II
1
1 According to internal model. 2 Strategic debt (senior, subordinated and other debt) divided by total capital (strategic debt + equity). 3 S&P capital.
%
Solvency II ratio well above
target capitalisation
Strong shareholders’ equity
despite capital repatriation
Debt leverage2 among the
lowest in the insurance industry
15.3
13.6 13.4%
2013 2014 2015
€bnIFRS
242277
302
2013 2014 2015
26.230.3 31.0
2013 2014 2015
Strengthened equalisation provision
largely protects HGB earnings
7.79.1 9.8
2013 2014 2015
Substantial capital buffer3
supports AA rating
German GAAP/Rating
AA
A AAA
Ratingagencies
€bn
19Analysts' conference 2016
Strong earnings in 2015
5.3 –2.4
3.0 0.2 3.1 –0.1 –0.42.6
Accounting
differences
Change of
equalisation
provision net
of taxes
HGB
result
Economic
earnings
Changes in
goodwill and
intangible assets,
valuation adjustments
and surplus funds
IFRS
result
Income and
expenses
recognised
directly in
IFRS equity
Economic earnings, IFRS and German GAAP (HGB) result in 2015
All results driven by strong reinsurance contribution
1 2 3
Munich Re (Group) – Results reconciliation
IFRS total
recognised
income and
expenses
€bn
20Analysts' conference 2016
Economic earnings driven by good technical result,
asset-liability management and one-offs
Munich Re (Group) – Economic view
Outlook 2016: In the range of IFRS result target
Actual Normalised
Operating economic earnings 3.0 2.1
Expected return existing business 0.7
New business value 1.7
Operating variances existing business 0.6
Other operating variances 0.0
Economic effects 2.0 1.6
Interest rate 0.8
Equity –0.1
Credit 0.1
Currency 0.8
Other1 0.4
Other non-operating earnings 0.3 –1.1
Total economic earnings 5.3 2.6
Economic earnings 2015
Positive impact from interest rate and FX changes;
gains in illiquid assets
Credit: Yield over risk-free was largely offset by market
value losses due to widening spreads
Normalisation: Overall small actual/normalised
difference – reinsurance above, ERGO below actuals
High VNB (Life Re), benign large losses and reserve
releases (P-C Reinsurance) compensate for …
… negative variances in ERGO L/H Germany
Normalisation: Operating economic earnings adjusted
for variances for current and prior years
Normalisation: Adjusted for very low effective tax rate
(all other line items pre-tax) and extraordinary effects
1
€bn
1 Primarily related to illiquid investments: Property, infrastructure, forestry, hedge funds, private equity.
21Analysts' conference 2016
Strong Solvency II capital generation supports
financial flexibility
Munich Re (Group) – Economic view
1
SII capital generation 2015 (including change in SCR)
SII capital generation exceeds capital repatriation
€bn
Economic
earnings
Change in
capital requirements
Other1 SII capital
generation
Capital
repatriation
SII capital
generation (net)
EOF/SCR
change 5.3 0.3 –0.3 5.3
–2.33.0
normalised 2.6 – – 2.6 0.3
1 Changes in other own funds items (–€0.1bn) and changes in consolidation group included in capital measures (–€0.2bn).
22Analysts' conference 2016
IFRS result exceeds annual guidance
€bn
5.3 –0.3–2.1
0.1 3.0 0.2 3.1
Economic
earnings
Change in
goodwill and
intangible
assets
Change in
valuation
adjustments
Change in
surplus
funds
IFRS
result
Income and
expenses
recognised
directly in
IFRS equity
Reconciliation of economic earnings to IFRS result 2015
Pleasing result allowing for dividend increase to €8.25 per share
and continuation of share buy-back of €1bn until AGM 2017
Goodwill/intangibles
Not recognised in Solvency II –
IFRS result burdened by ERGO
goodwill impairment of €452m,
partially offset by currency effects
Change in valuation adjustments
Assets and liabilities not valued
at fair value in IFRS, e.g. loans,
technical provisions
Munich Re (Group) – Economic view
2
1 2
IFRS total
recognised
income and
expenses
23Analysts' conference 2016
IFRS result driven by strong reinsurance contributionMunich Re (Group) – IFRS view
2
Reinsurance ERGO Munich Health
P-C
Combined ratio
89.7% (78.6%)
Major-loss ratio
6.2% (4.7%)
LIFE
Technical result
of €335m –
Slightly below
ambition of
€400m p.a.
REINSURANCE
Combined ratio 101.1% (102.2%)
PRIMARY INSURANCE
Combined ratio 93.2% (94.5%)
NET RESULT
€3,261m (€1,371m)NET RESULT
–€227m (–€644m) NET RESULT
€88m (€5m)
L/H GERMANY
Goodwill
impairment
INTERNATIONAL
Combined ratio
104.7% (115.3%)
P-C GERMANY
Combined ratio 97.9% (103.9%)
Munich Re (Group)
NET RESULT
€3,122m (€731m)
OPERATING RESULT
€4,819m (€1,427m)
INVESTMENT RESULT
RoI of 3.2% (2.9%)
Solid return – High disposal gains,
derivative losses and write-downs
Overall sound operating
performance – One-offs in
both directions
Benign major claims and
substantial reserve releases in
property-casualty reinsurance –
Loss at ERGO in Q4
2015 (Q4 2015)
24Analysts' conference 2016
Short-term earnings pressure mitigated by
strong balance sheet
Conservative accounting translates into
earnings as a result of ordinary business activity
Part of the valuation reserves realised as a result
of usual portfolio turnover
Ongoing releases of loss reserves without
weakening resilience against future volatility
1 In % of net earned premiums, adjusted for commission effects.
Munich Re (Group) – IFRS view
Investment result
Lower
reinvestment yields
Ongoing
disposal gains
P-C reinsurance – Release of loss reserves1
Reinsurance
cycle
Strong
reserving position
2.83.7
5.8
4.4
5.3
7.2
2010 2011 2012 2013 2014 2015
1.6 1.2 0.7 1.8 2.6 2.7
711
22
15
31
26
2010 2011 2012 2013 2014 2015
Net disposal gains Unrealised gains
€bn
2
%
25Analysts' conference 2016
4.03.6 3.5
3.2 3.1
3.3
2.4 2.3 2.4
1.9
2011 2012 2013 2014 2015
Running yield
Reinvestment yield
Long duration stabilises investment returns
1 Bubble size reflects reinvestment volume.
Discipline prevails: No risky hunt for yield to compensate for low interest rates
Solid reinvestment yield without taking high risks
In addition to long duration, geographic diversification mitigates attrition of running yield
At current interest-rate levels, expected annual attrition of running yield ~20bps in 2016
Munich Re (Group) – IFRS view
0
1
2
3
4
0 5 10 15
Running and reinvestment yield
Reinvestment yield (%)
Average maturity (years)
Pfandbriefe/
covered bonds
Structured
products
Composition of reinvestment yield 20151%
2
Corporate
bondsBank
bondsGovernment
bonds
26Analysts' conference 2016
–1.9
–0.2
–0.0
0.1
Well-balanced investment portfolio provides
resilience against volatile capital markets
Manageable P&L volatility
Munich Re (Group) – IFRS view
Resilient to changes of interest
rates, spreads and inflation
Significant decline of equity/
commodity markets may leave
its mark (impairments)
IFRS P&L sensitivity1,2
1 As at 31.12.2015. 2 Rough calculation after estimation of policyholder participation and deferred tax.
€bn
Corporate bond portfolio of good
quality – 86% investment grade
Broad diversification across
industries – small exposure
to oil and gas sector
%Corporate bonds by sector1
Industrialgoods
13
Oil/gas
11
TOTAL
€20.5bn
%Fixed-income portfolio1
Limited exposure to credit risks
Structured products, corporate
and bank bonds only make up
16% of fixed-income portfolio1
2
TOTAL
€203bn
Inflation
+100bps
Interest-rates
+100bps
Spreads
+100bps
Equity/commodity
–30%
Other
55
Utilities
21Corporate
bonds
10
Bank bonds
3
27Analysts' conference 2016
Munich Re (Group) – IFRS view – Reserving position
Reserving: Global hot spots
Reserving hot spots well controlled – Provisions for risk scenarios adequately set
Motor liability Industry impact Munich Re impact
USA
Distracted
driving, higher
vehicle miles
travelled,
increase in truck
tonnage
Increasing loss
frequency and
severity lead
to reserve
increases for whole
US primary market
Limited impact due
to very small market
share in US motor
France
Under-pricing/
reserving –
not adequately
reflecting higher
cost of care
Reinsurance
phenomenon –
high combined
ratios and various
reserve
strengthenings
Strong reaction to
early signs of ad-
verse development
in the past, now
stable indications
UK
Shift from lump-
sum to periodical
payments for
bodily injury
claims
Increased tail,
uncertainty about
mortality and
discount rate for
claims settlement
Close monitoring of
frequency/severity
trends – significant
exposure reduction
in recent years
Casualty Industry impact Munich Re impact
USA
Comparatively
high litigation
risk, late loss
emergence
High risk of
change, leading
to volatile loss
developments
Specific IBNR for
accumulation risk
set up to protect
portfolio
US workers’
compensation
High losses for
reinsurers by
business under-
written during
soft market
(late 90s)
Long-tail
development with
significant late
loss emergence
Stringent execution
of exit strategy –
overall stable
reserving situation
Asbestos
Complex
litigation,
changes in legal
and regulatory
environment
Change in
projected costs
and number of
claims
Reduced exposures
by sizeable
commutations –
stable survival ratio
over time
2
28Analysts' conference 2016
2014
2013
2012
2011
2010
20092008
2007
2006
2005 and prior
1
10
100
1,000
10,000
1 10 100 1,000 10,000
Expected reported loss
Actual reported loss
Actual versus expected comparison –
Loss-monitoring yields consistent picture across years
Actual losses consistently below actuarial expectations –
Very strong reserve position
Munich Re (Group) – IFRS view – Reserving position
Reinsurance group – Comparison of incremental expected losses with actual reported losses1 €m
Legend: Green Actuals below expectation Solid line Actuals equal expectation
Red Actuals above expectation Dotted line Actuals are 50% above/below expectations
By exposure year By line of business
1 Reinsurance group losses as at Q4 2015, not including parts of Risk Solutions, special liabilities and major losses (i.e. events of over €10m or US$ 15m for Munich Re's share).
2
Aviation
Credit
Engineering
Fire
Marine
Motor
Personal Accident
Risks/Other Property
Third-Party Liability
100
1,000
10,000
100 1,000 10,000
Expected reported loss
Actual reported loss
29Analysts' conference 2016
Positive run-off result without weakening resilience
against future volatility
Munich Re (Group) – IFRS view – Reserving position
Ultimate losses1 (adjusted to exchange rates as at 31.12.2015) €m
Accident year (AY)
Date ≤2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total
31.12.2005 50,061
31.12.2006 50,702 11,387
31.12.2007 50,767 11,444 12,708
31.12.2008 50,303 11,332 12,911 14,127
31.12.2009 49,857 11,104 12,811 14,381 13,878
31.12.2010 49,546 10,819 12,736 14,331 13,819 14,287
31.12.2011 49,401 10,730 12,694 14,033 13,364 14,521 18,455
31.12.2012 49,092 10,544 12,316 13,880 13,238 14,400 18,596 15,209
31.12.2013 48,997 10,570 12,079 13,711 13,238 14,469 18,278 15,032 15,124
31.12.2014 48,917 10,455 11,998 13,430 12,925 14,453 17,892 14,830 15,336 15,092
31.12.2015 48,637 10,373 11,762 13,296 12,693 14,289 17,731 14,591 15,301 15,115 14,369
CY 2015 run-
off change280 82 236 133 232 163 160 239 36 –23 – 1,538
CY 2015 run-
off change (%) 0.6 0.8 2.0 1.0 1.8 1.1 0.9 1.6 0.2 –0.2 – 0.9
Prior-year releases of €1.5bn
driven by reinsurance portfolio
Favourable actual vs.
expected comparison
facilitates ultimate
reductions for prior years
Reserve position remains
strong
AY 2015: Prudent initial
assessment
Reinsurance2 €1,535m
ERGO €3m
Ultimate reduction
1 Basic and major losses. 2 Thereof €1,402m basic and €133m major losses.
2
30Analysts' conference 2016
6.67.7
9.19.8
2012 2013 2014 2015 2016e 2017e
3.10.3 –0.4
–0.42.6
Solid German GAAP (HGB) earnings
Difference between
IFRS results of
subsidiaries and
their dividend
payments to MR AG
Other
accounting
differences
Change of
equalisation
provision net of
taxes
HGB
result
IFRS
result
€bnReconciliation of IFRS (Group) to HGB result (MR AG)
Underwriting result protected by strong reserves, replenishment largely completed –
Distributable earnings sensitive to adverse capital market development
Munich Re (Group) – German GAAP (HGB)
Maximum requirement
2012–2015: Strengthening of reserve –
~85% of max. requirement now achieved
2016e: No significant replenishment
2017e: Relief due to drop-out of extreme
outliers
Equalisation provision €bn
3
2 3
ILLUSTRATIVE
31Analysts' conference 2016
Distributable earnings of parent company –
Main drivers
Munich Re (Group) – German GAAP (HGB)
2.9 –1.3
–1.0
2.6 0.2 3.3
Distributableearnings
31.12.2014
Dividend Sharebuy-back
HGB result2015
Others Distributableearnings
31.12.2015
Strengthened distributable earnings safeguards capital repatriation –
Improved underwriting result overcompensats for ERGO write-down
1 Changes in restrictions on distribution.
HGB result financing capital repatriation
1
Average 2009–2015
–1.2 –0.7 1.9
€bn
2.0
1.3 –0.9
0.2 2.6
HGB result2014
Underwritingresult
Investmentresult
Taxes HGB result2015
HGB result – Main drivers 2015 vs. 2014 €bn
Underwriting result
Benign large losses
Higher reserve releases
Reduced allocation to
equalisation provision
Investment result
Higher regular income
(mainly dividends)
Write-down of ERGO:
–€1.1bn
3
32Analysts' conference 2016
Agenda
Strong track record – and new ideas Nikolaus von Bomhard
Munich Re (Group) Jörg Schneider
Risk management Bernhard Kaufmann
ERGO Markus Rieß
Reinsurance Property-casualty Torsten Jeworrek
Reinsurance Life Joachim Wenning
Backup
33Analysts' conference 2016
Proactive risk management builds up resilience
in an unpredictable and unstable environment
Munich Re well prepared for turbulent market conditions
Risk management measures stabilise SII ratio
Political
risks
Limits and budgets
Management of accumulations
Strict underwriting guidelines
Retrocession for peak nat cat scenarios
High volatility
Dampening
of volatility
Risk management – Overview
Economic
risks
Insurance
risks
Current environment
Diversified investment portfolio
Group-wide trigger system for
ALM risks
Hedging strategy
Limits for sovereigns
High quality of counterparties
Forward-looking scenario
analysis
34Analysts' conference 2016
Forward-looking risk management
enables change and innovation
Munich Re’s approach supports development of insurance solutions globally
Examples of risk management contributions to Munich Re initiatives
New
(re)insurance
products
New risk-
related
services
New clients
and
demands
New
business
models
Cooperation to develop
triggers for pandemic disease
Risk analytics and risk
mitigation for weather risks
Risk services
US Homeowners Inland Flood Coverage
Design of flood product includes defined
quantitative risk appetite and for rate of
product rollout and accumulation of risk
Risk mitigation of operational risks via
business process modelling in internal
control system
Insurance protection gap
Cyber risks
Identification and management
of accumulation scenarios
Satellite whole-life cover, Green
Tech Solutions
Specific risk assessment
and guidelines
Innovative products
Support of big-data applications, esp. in
risk analysis, assessment and control
(e.g. claims detection, business
interruption and contingent business
interruption)
Digitalisation/big data
Risk management – Overview
35Analysts' conference 2016
Risk category Group
Delta
RI ERGO MH
Remarks20142
2015 2015 2015 2015
Prop.-Casualty 5.7 6.3 0.6 6.2 0.4 P-C: Increase driven by reinsurance –FX and growth in special risks
Life/Health 4.8 4.7 –0.1 3.8 1.3 0.3
Market 8.8 8.7 –0.1 5.8 4.3Credit: De-risking of investment portfolio and full implementation of SII methodologyCredit 4.6 4.2 –0.5 2.7 1.6
Operational risk 1.0 1.0 – 0.8 0.4 0.1
Other3 0.2 0.1 –0.1
Simple sum 25.1 25.1 – 19.3 8.0 0.4
Diversification –9.1 –9.3 –0.1 –7.4 –2.1 0.0 Diversification benefit: 37%
Tax –2.2 –2.3 –0.2 –2.0 –0.7 –0.1 Loss-absorbing capacity of deferred taxes
Total SCR 13.8 13.5 –0.3 9.9 5.2 0.3
Breakdown of Solvency Capital Requirement (SCR) by
risk category for Munich Re according to internal model1
€bnSolvency capital requirement – Breakdown by risk category and segment
Risk management – Risk disclosure
1 Munich Re uses a full internal model, which was approved by BaFin and core college in 2015.2 After reconciliation into SII metric.3 Capital requirements for other financial sectors, e.g. institutions for occupational retirement provisions.
No major movement in SCR reflects unchanged risk profile of Munich Re (Group)
36Analysts' conference 2016
1
2
3
4
Risk-bearing capacity allows high exposure
for peak scenarios, but only at adequate price levels
1 Munich Re (Group). Return period 200 years, pre-tax. 2 Natural catastrophes, man-made (including terrorism and casualty accumulation) and major single losses.
Nat cat exposure (net of retrocession) – AggVaR1
5.76.3
2014 2015
SCR property-casualty €bn€bn
Basic losses
Major losses2
Diversification
Total
3.6
5.7
–3.0
6.3
Risk management – Property-casualty risk
Appreciation of major currencies (USD, AUD,
GBP) against EUR, impact on basic/major losses
Exposure increase in special risks (e.g. weather
risks) impacts basic lossesTop nat cat exposures
High diversification between natural catastrophe risks,
both by region and perils, adequately reflected in internal model
1 Atlantic Hurricane
2 Storm Europe
3 Earthquake Los Angeles
4 Earthquake Japan
5 Cyclone Australia
Top 5 exposures
1 2 3 4 5
37Analysts' conference 2016
Natural catastrophe losses observed over the past
years are in line with our model results
Nat cat losses (gross of retrocession) since 2001 – Property-casualty reinsurance
Risk management – Property-casualty risk
Observed nat cat experience fully in line with our modelling assumptions,
reflecting the inherent volatility of the very nature of events
€bn
1
2
3
4
5
6
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Incurred nat cat losses Nat cat expectation as per 2015 Estimate for annual
nat cat losses:
~8.5 combined-ratio
points (~€1.4bn)
It is not unusual to stay
below this estimate for
four years in a row
It is more likely to see
four benign years in a
row, rather than to have
two consecutive years
exceeding expectations
38Analysts' conference 2016
Life and health risk – Stable overall,
with considerable risk reduction at ERGO
Risk management – Life/Health risk
1 Munich Re (Group). Return period 200 years, pre-tax. 2 ERGO L/H has a share of ~60% in this risk category.3 ~60% of ERGO L/H’s longevity SCR is based on behavioural risk, e.g. related to financially rational policyholder behaviour.
Life/Health – VaR1 SCR Life/Health €bn€bn
4.8 4.7
2014 2015
Longevity
Mortality
Morbidity
Health
2.4
3.0
2.5
0.5
1.5
3.2
2.6
0.620142015
Decrease driven by ERGO L/H3
Favourable market developments
Further refinements in SII model
Full implementation of SII risk-free
interest rates curve
Refined modelling of “ZZR”
Investment performance better
than expected
Longevity2 Mortality/Morbidity
Slight increase driven by
Reinsurance Life
Health
Slight increase largely
driven by business growth
of Munich Health in the
Middle East
39Analysts' conference 2016
Market risk – Well-balanced profileRisk management – Market risk
80
100
120
140
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q40
20
40
60
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Fixed-incomeassets
Economicliabilities
2014 2015
1 Equity risk also includes alternative investments, such as investments in infrastructure.2 Transition into SII metric.
DV01 – Sensitivity to parallel downward shift of yield curve by one basis point reflects portfolio size €m
Reinsurance ERGO
Risk contribution (undiversified) %
1
20
20
40
60
80
2009 2010 2011 2012 2013 2014 2015
Equity General interest rate Credit spread Real estate Currency
Asset-liability mismatch
2014 2015
Asset-liability mismatch
Despite substantial decrease in interest rates,
duration of assets and liabilities remains closely matched
40Analysts' conference 2016
Liability-driven investment process
reduces sensitivity of SII ratio
Risk management – Market risk
Asset derivatives aligned to liability structure stabilise economic solvency
Assets matching liabilities VaR before and after hedging Effects on P&L volatility
SII ratio
Hedging mitigates the
impact of FX, inflation and
interest-rate changes on
own funds in the economic
balance sheet
IFRS
As derivatives are
measured at fair value,
market value changes are
immediately P&L-effective,
while valuation of liabilities
remains largely unaffected
… by using physical assets and
derivative instruments, as well as
risky assets correlated to these risks,
e.g. equities and commodities
Investments
Physical
Derivatives
Provisions
Technical
Non-
technical
Macroeconomic changes affecting
assets and liabilities – hedging
(reduction of VaR) usually done in
the investment portfolio …
Interestrate
Inflation FX Riskyassets
Before hedge
After hedge
ILLUSTRATIVE
AssetsLiabilities
Interest rate Inflation FX
41Analysts' conference 2016
Operational risk – Slightly increased due to
lower diversification and refined loss analyses
Risk management – Operational risk
1 Munich Re (Group). Return period 200 years, pre-tax. 2 ORIC: Listed are the first-level categories according to the standard of Operational Risk Consortium.
Calculation based on approx. 20 scenarios for
each field of business
Scenario categorisation by ORIC standard2
Risk strategy for operational risk: Trigger defined
at business-field level
Internal control system implemented to actively
manage operational risks for Munich Re (Group)
Capital requirement for operational risk validated
by internal and external loss databases
1.0 1.0
2014 2015
Operational risk scenarios
1 Inappropriate financial reporting:
Erroneous tax statement
2 Legal or regulatory breaches:
Antitrust law breach
3 Process error, wrong data processing:
Inappropriate asset allocation
Top 3 scenarios2
Operational risk scenarios – VaR1 €bn SCR operational risk €bn
Integral part of the approved full internal model
42Analysts' conference 2016
Further improvement in Munich Re’s Solvency II ratioRisk management – Solvency II ratio
SII ratio €bn
277% 302%
2014 20151
Remarks
Fully consolidated approach appropriately
covers risk situation of Munich Re (Group)
No application of optional transitionals, LTG or
other measures in solo entities and at Group
level by end of 2015 …
… which remains an option for selected life
entities subject to assessment of further
development of interest rates
1 Ratio after dividend of ~€1.3bn for 2015 to be paid in April 2016: 292%.
Capitalisation in the SII regime remains very comfortable
20152014
Solvency capital
requirement
Eligible
own funds
38.2
13.8
40.7
13.5
20152014
43Analysts' conference 2016
Ratio as at 31.12.15
Interest rate +50bps1
Interest rate –50bps1
Spread +100bps
Equity markets +30%
Equity markets –30%
FX –20%
Inflation +100bps
Atlantic Hurricane2
UFR –100bps
Volatility adjustment
SII ratio – Sensitivity
302
313
290
272
317
286
299
298
282
298
319
%
Sensitivities of SII ratio
All relevant stress scenarios leave Munich Re’s SII ratio in a comfortable range
220175
Risk management – Solvency II ratio
1 Parallel shift until last liquid point, extrapolation to unchanged UFR.2 Based on 200-year event.
Assumptions
Use of full consolidated accounts
for Munich Re (Group)
No consideration of optional long-
term-guarantee measures, e.g.
Transitionals
(Dynamic) volatility adjustment
Matching adjustment
Credit risk considered for all
fixed-income securities, including
government bonds (e.g. in EEA)
44Analysts' conference 2016
Munich Re’s sensitivities reflect full economic impactRisk management – Solvency II ratio
For comparability of published SII numbers,
a detailed view on applied measures is necessary
Application of optional SII measures – Impact on SII ratio and sensitivities
Reduction of … Use of dynamic volatility
adjustment
No credit risk for EEA
government bonds
Application of D&A method
for US subsidiaries
… spread sensitivity ~1/2 ~1/3 ~1/5
… equity sensitivity ~1/3
SII ratio ~339% ~329% ~285%
Combined spread sensitivity would go down to ~10% pts. –
Spread +100bps: SII ratio 302% → 292% (instead of 272%)
45Analysts' conference 2016
Agenda
Strong track record – and new ideas Nikolaus von Bomhard
Munich Re (Group) Jörg Schneider
Risk management Bernhard Kaufmann
ERGO Markus Rieß
Reinsurance Property-casualty Torsten Jeworrek
Reinsurance Life Joachim Wenning
Backup
46Analysts' conference 2016
ERGO – Key financials
€bnGross premiums written Net result €m
%Combined ratio %Return on investment
GWP: Decline in traditional life
offsets growth in P-C Germany
and International
Net income: Negative result
primarily driven by goodwill
impairment of €429m
Combined ratio: Deterioration
in Germany and International
driven by reserve strengthening
and nat cat expenses
€bnEconomic earnings
Major result drivers
ERGO – Key financials
169
–227
2014 2015
9.8 9.4
3.1 3.2
3.8 3.9
16.7 16.5
2014 2015
International
P-C Germany
L/H Germany
95.3 97.397.9104.7
Germany International
–1.9
1.3
2014 2015
3.93.1
2014 2015
47Analysts' conference 2016
Low interest rates leave their mark
on German life business
ERGO – Life/Health Germany
€mSegmental breakdown – Total premiums
Life
4,016 (39%)
(▲ –7.9%)
Health
5,202 (50%)
(▲ –0.9%)
Direct
1,104 (11%)
(▲ –1.1%)
Net result €m
269
–329
2014 2015
TOTAL
€10.3bn
Life
€346m lower premiums due to lower
traditional business
Health
Growth in supplementary insurance, lower
premiums in comprehensive insurance
Direct
Lower single premium capitalisation business
in life (–€15m) while dental insurance remains
growth driver in Health
Significant decrease driven by non-operating
result, mainly non-tax deductible goodwill
impairment
48Analysts' conference 2016
New business: Shift to less interest-rate-sensitive
products and closing of traditional products
ERGO – Life Germany
Target portfolio1 – New business APE
70
46
29
30
54
71
2010 … 2014 2015
Target portfolio (incl. new life product)
Thereof new life product
Traditional portfolio
% Shift new business to target portfolio
Target portfolio
Unit-linked insurance (with/without guarantee),
term insurance, occupational disability
insurance, death benefit, immediate annuities
New life products
Share of ~20% in 2015
Extension to corporate pensions since
January 2015
Traditional portfolio
Most traditional products closed from
1 January 2016
Riester and Rürup pensions will be offered
only in an investment-type version following
the introduction of such a product by Vorsorge
Life in 2016
1 Incl. ERGO Direkt Leben.
49Analysts' conference 2016
Declined reinvestment yield
still with low impact on average yield …
ERGO – Life Germany
1 German GAAP figures for ERGO Leben, Victoria Leben and ERGO Direkt Leben.
Average yield above average guarantee
Key figures1 – Life Germany
Long duration of fixed-income portfolio keeps average yield at relatively high level
Asset and liability duration difference far below one year
Non-interest-bearing ZZR reduces average guarantee 2015 by ~50bp
Low bonus rates: 2.7% vs. market average 2.85% (3.16% in previous year)
1%
2%
3%
4%
2013 2019
avg. yield
avg. guarantee
Average yield vs. average guarantee
Reinvestment
yield
Average
yield
Average
guarantee
2015 ~1.8 ~3.4 ~2.7
2014 ~2.6 ~3.6 ~3.0
2013 ~2.7 ~3.6 ~3.2
%
ILLUSTRATIVE
50Analysts' conference 2016
… while measures to support guarantees
have financial impact in 2015
ERGO – Life Germany
1 Based on interest-rate scenarios. 2 German GAAP figures.
ZZR – Low interest-rate reserve
Local GAAP reserve against low interest rates
Expected accumulated ZZR in 2016: ~€3.5bn
Partly financed through unrealised gains –
positive impact on IFRS earnings when realised
Effect on IFRS net income in 2015: €71m
Interest-rate hedging programme
Started in 2005 – Protection against
reinvestment risk via receiver swaptions
Continuously buys additional slices, depending
on capital market and portfolio development
Effect on IFRS net income in 2015: –€11m
Key financials2 – €bn Free RfB Terminal bonus fund Unrealised gains Accumulate ZZR
2015 0.9 1.6 12.2 2.5
2014 0.9 1.7 14.6 1.5
2013 0.8 2.0 5.9 0.8
ZZR reference rate – Projection1 %
4.10
2.88
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
3.25
3.50
3.75
4.00
4.25
2010 2012 2014 2016 2018 2020
Reference rate
Increase
Stable
Decrease
4.00
3.25
2.75
2.25
1.75
1.25
Guarantee level ILLUSTRATIVE
51Analysts' conference 2016
Property-casualty Germany – Operating profitability
weaker than previous year due to one-offs
ERGO – Property-casualty Germany
Net result €m
176
214
2014 2015
€mGWP by lines of business
Other
336 (8%)
Accident
654 (21%)
Liability
536 (17%)
Motor
663 (21%)
Fire/property
577 (18%)
Legal
protection
395 (13%)
Large losses 2.4%-pts.
above budget
Reserve adjustments:
1.5%-pts.
Balanced portfolio
Increase by €47m vs. 2014 driven by
UK branch – higher level of new
business in title insurance and transfer
from assumed to direct business
Combined ratio %
TOTAL
€3,162m
Positive tax and FX effects
overcompensate for weaker
underwriting result
95.3
97.9
2014 2015
52Analysts' conference 2016
ERGO – International
Gross premiums written €m
Combined ratio %
873 816 884
225 232 296
649 652706
451 484506
2,198 2,1842,392
2013 2014 2015
Other
Legal
Turkey
Poland
50
70
90
110
130
150
2013 2014 2015
Turkey
India
Poland
Legal
Greece
International P-C – Premium growth,
profitability affected by local challenges
Poland: Profitability affected by new KNF
guidelines and strong competition in corporate
business. Balanced measures taken to stabilise
profitability but still allowing for cautious growth
Turkey: Gaining market share despite steep
price increases in MTPL and strong customer
selection. Market profitability affected by reserve
increases, predominantly in old claims cases.
ERGO severely affected due to high market
share in motor in the past, which has been
reduced in recent years
Legal protection: Overall stable top- and
bottom-line of DAS International. DAS UK with
adverse development due to ongoing restructur-
ing. Premium growth 2015 driven by positive
FX effects (GBP)
India: Agreement on share increase to 49%
emphasises importance of Indian market and
further expansion of non-life business in Asia.
Entity with ongoing strong growth (+9% in 2015)
Major developments
53Analysts' conference 2016
ERGO – International
International life – Focus on new product strategies
and in-force management
Total premiums €m
531 575 548
564613 594
130
366 392453
474 4571,678
2,028 1,991
2013 2014 2015
Other
Poland
Austria
Belgium
New business – Promoting capital-light products
Belgium
New product strategy with focus on capital-light
products under development
Austria
Introduction of new hybrid product in Q1 2016
Poland
Already strong footprint with unit-linked products
sold via bancassurance channel
Green-/brownfields, M&A and joint ventures (JV)
China (50% participation) – Business development in line with plan
India (49% participation) – First step of regulatory approval (R1) of JV granted in Q4 2015
Back-book – Stringent portfolio management
Sale of ERGO Italy
Exposure reduction to traditional life business
in non-core region
In-force management
Ongoing efforts to reduce risk and enhance
shareholder returns
54Analysts' conference 2016
ERGO – Economic earningsERGO – Economic earnings
Overall positive contribution to Munich Re’s earnings related to development
of capital market parameters – ERGO L/H Germany as main driver
New business value
Health: €0.2bn, in line with expectations
Life: €0.1bn
P-C nearly unchanged to last year
Operating variances
Negative from existing business in
L/H and in P-C
Negative experience variances for the
financial year and adverse updates in
expenses and lapse assumptions at
L/H entities
Main drivers of
operating economic earnings
ERGO 2015
€bnL/H
GermanyP-C
GermanyInter-
national
Operating economic earnings –0.3 0.1 0.0
Expected return
existing business 0.2 0.0 0.1
New business value 0.3 0.3 0.0
Operating variances
existing business–0.7 –0.2 0.0
Other operating variances –0.0 0.0 0.0
Economic effects 0.8 0.0 0.1
Other non-operating earnings 0.5 –0.1 –0.1
Total economic earnings 1.1 0.1 0.1
55Analysts' conference 2016
Structural basis for ERGO realignmentERGO – Outlook
ERGO Deutschland AG ERGO International AG ERGO Digital Ventures AG
Strengthen sales force
Improve cost structure
Modernise systems
Traditional business
“Run”
Improve results
Explore cross-country
synergies
Identify growth areas
Create cultural environment
for innovation
Build strong digital pillar –
integrate ERGO Direkt
Enable transformation of
traditional business
Digital and direct business
“Build and change”
International alignment
Strategic steering
ERGO Group AG
56Analysts' conference 2016
Agenda
Strong track record – and new ideas Nikolaus von Bomhard
Munich Re (Group) Jörg Schneider
Risk management Bernhard Kaufmann
ERGO Markus Rieß
Reinsurance Property-casualty Torsten Jeworrek
Reinsurance Life Joachim Wenning
Backup
57Analysts' conference 2016
92.7
89.7
2014 2015
Reinsurance – Key financials
€bnGross premiums written Net result €bn
%P-C: Combined ratio
Normalised combined ratio:
98.7% (~98% in 2014)
%Return on investment
Life
Underlying performance across
all regions almost compensates
for single large mortality claims
Property-casualty
Benign major claims and
substantial reserve releases
Disposal gains offset derivative
losses (hedging) and impairments
€m
Slightly below annual target
of ~€400m
Life: Technical result
Major result drivers
3.1 3.2
2014 2015
Reinsurance
16.7 17.7
10.0 10.5
26.8 28.2
2014 2015
279335
2014 2015
2.52.9
0.40.32.93.3
2014 2015
58Analysts' conference 2016
Reinsurance Property-casualty – Economic earningsReinsurance Property-casualty – Economic earnings
Benign large losses and reserve releases above expectations
New business value
Reflecting unchanged reserving discipline –
value adjusted for prudency margin: €0.9bn
Benefit from benign major losses for current
development year
Operating variances
Favourable actual vs. expected comparison
allows for ultimate reductions for prior years
(€1.2bn adjusted for commissions)
Large losses below expectations also for
prior years
Main drivers of operating economic earningsReinsurance property-casualty – €bn 2015
Operating economic earnings 1.7
Expected return existing business 0.2
New business value 0.2
Operating variances existing business 1.3
Other operating variances 0.0
Economic effects 0.7
Other non-operating earnings –0.1
Total economic earnings 2.3
59Analysts' conference 2016
As a leading Tier-1 reinsurer, Munich Re successfully
manages cyclical and structural market changes
Reinsurance Property-casualty – Munich Re strategic positioning
Preferential
client
access
Leading
risk
know-how
Strong and profitable core business
Superior
diversification
Stringent
cycle
management
1 Related to premium volume in January 2016 renewals.2 Munich Re (Group).
~50% private placements1
~2/3 direct client business
~30% tailor-made solutions1
Comprehensive service offering
Well-balanced portfolio in
terms of perils, forms of cover,
regions, short/long-tail
Continued strong u/w discipline
and conservatism in reserving
Deliberate portfolio shifts to less
commoditised business
Strong
earnings
from
Risk
Solutions
Growth in specialty niches and innovation
Driving
industry
innovation
Strategic
use of
alternative
capital
High profitability
Largely detached from cycle
€5bn premium volume
~€500m premium2 from innovative
insurance products
Active development of business
opportunities in collaboration with clients
and corporate partners
Renewal of Eden Re II sidecar at
increased capacity and regional coverage
Combining peak-risk competence with
institutional investors’ interest in
reinsurance risk
Munich Re in excellent position to achieve good results
and to seize opportunities for profitable growth
60Analysts' conference 2016
Munich Re well-positioned and relatively resilient to
pressure on rates
Reinsurance Property-casualty – January renewals 2016
Europe/Latin America
Asia-Pacific
US/Global accounts
Rate changes January renewals
Property
prop.
Property
XL
Casualty
prop.
Casualty
XL
Market range1 Munich Re
1 Range of market rate changes in January 2016 renewals published by brokers, media and observed by own experts. 2 e.g. in M&A cases, multi-line covers, multi-year covers, whole-account solutions.
% Current market developments
Reinsurance capital remained
abundant for most segments, but
Slowdown of growth of
alternative capital
Slowing pace of rate decrease
in key segments, e.g. US
property cat
Continued tiering of reinsurers
Preference for major, best-
rated reinsurers providing
scale, security, diversification
Increasing demand for complex
programmes2
Hardly any pressure on wordings
and largely stable retentions
–20
–10
Implications for Munich Re
Globally well-positioned
to counterbalance regional
rate differences and flexibly
shape the portfolio
Scale and financial strength
providing competitive
advantage through the cycle
Value proposition as
strategic partner strongly
valued by clients
Capabilities designed to
offer tailor-made solutions
meeting clients’ demand
for large and complex
reinsurance
–20
0
61Analysts' conference 2016
Reinsurance Property-casualty – January renewals 2016
Portfolio profitability remains sound, with strong client
relationships enabling attractive business opportunities
Total Property Casualty Specialty lines
Business line Prop. XL Prop. XL Marine Credit Aviation
Premium split1 €9.1bn 28% 10% 41% 4% 9% 5% 3%
+0.7% +2.3%
–5.3%
+6.0% +3.1%
–16.0%
–2.8%
–12.2%
~ –1.0% –1.0%–5.4%
+0.0%
–0.6% –3.0% –0.5% –3.5%
1 Relative premium share in relation to total renewable business in January.
Munich Re portfolio – Premium change in major business lines
Profitability supported by active portfolio management,
preferential business access and underwriting discipline
Price
change
Volume
change
Price
change
Property XL: sustained pressure on rates, but less negative than one year ago
Proportional: almost stable, benefiting from rather flat primary rates overall
62Analysts' conference 2016
Active portfolio managementReinsurance Property-casualty – January renewals 2016
Growth from attractive business opportunities
compensating for cycle-driven reductions
Growth
Preferential
business access
Structured solutions, CRT and “straightforward” traditional covers,
e.g. short-term capital need after M&A
Business lines: casualty and property
Regional focus: USA, Lloyd’s market, Europe, Latin America
~€500m
Original growth/
higher cessions
Growth in underlying primary business (e.g. UK motor),
Higher share of business with existing clients (US casualty and
Lloyd‘s market; emerging markets)
~€300m
Reduction
Demand-driven
reductions
Higher retentions on the client side
Regional focus: USA, Lloyd’s market, world wide
~–€200m
Price effect/
cycle management
Property, marine (offshore energy), aviation
Regional focus: world wide
~–€500m
63Analysts' conference 2016
Reinsurance Property-casualty – Renewal outlook
Continuously challenging conditions for upcoming
renewals, as market dynamics are unchanged
AprilJanuary July
Rest of Asia/ Pacific/Africa
Europe
Worldwide
NA3
LA4
Rest of Asia/Pacific/Africa
Europe
LA4
NA3
Worldwide
Japan Australia/New Zealand
January2
52Worldwide
LA4 Europe
TOTAL
€2.3bnNA3
Capacity and competition expected to remain high
Given higher nat cat shares, overall pricing trend will
largely depend on development of nat cat prices
Focus: JapanNat cat share: 35%
Focus: USA, LA, AustraliaNat cat share: 20%
Focus: EuropeNat cat share: 11%
Slightly negative price
change of ~-1.0%
TOTAL
€9.1bnTOTAL
€1.1bnTOTAL
€18bn
Remaining29
April6
July13
Total P-C book1
Nat cat share: 14%
More than half of
the total P-C book
renewed in January
Asia/ Pacific/Africa
1 Approximation – not fully comparable with IFRS figures.2 Includes Risk Solutions business (16% of January business and 8% of total P-C book).3 NA = North America. 4 LA = Latin America.
Treaty business
Underwriting discipline ensures sound portfolio quality
64Analysts' conference 2016
Sustainable earnings level supported by broad set-upReinsurance Property-casualty – Portfolio quality
Shift from property and
specialty to casualty
Cycle management
mitigates price pressure
1 Gross premiums written property-casualty reinsurance as at 31.12.2015 (31.12.2014).2 Aviation, marine and credit. 3 Part of Special and Financial Risks providing solutions for large corporate clients.
Continued (slight) growth of
US specialty primary business
Deliberate reductions at more
cycle-exposed units, e.g. CIP,
Watkins
Tailor-made
solutions
18 (18)
Other
traditional business
54 (57)
Risk
Solutions
28 (25)
TOTAL1
€18bnTOTAL
€13bn
Casualty
47 (45)
Specialty2
10 (11)Other property
33 (34)
Nat cat XL
10 (10)
%Total P-C book Traditional Risk Solutions
Watkins
9 (10)
Specialty
markets
13 (13)
American Modern
23 (23)
Corporate
Insurance Partner3
13 (15)
Hartford
Steam
Boiler
19 (17)
Other
23 (22)
TOTAL
€5bn
Well-diversified portfolio
Stabilising impact from Risk
Solutions and tailor-made
transactions
Cycle management reduces
traditional business
% %
Superior diversification provides flexibility in managing the portfolio
1 2
65Analysts' conference 2016
Portfolio profitability protected by disciplined
underwriting and consistent cycle management
Reinsurance Property-casualty – Traditional portfolio
1
%Traditional P-C portfolio 2015 (2014) – Gross premiums written1
Agro
7 (7)
Property ex
nat cat XL
26 (27)
Credit
5 (5)
Casualty motor
27 (26)
Property
nat cat XL
10 (10)
Aviation
1 (1)
1 Traditional reinsurance, incl. tailor-made solutions. Allocation based on management view, not comparable with IFRS reporting.
Casualty
ex motor 20 (19)
Marine
4 (5)
Share increases
Profitable casualty lines
(motor and non-motor)
Less volatile proportional
book (with rates broadly flat
to slightly increasing)
Share reductions
Deliberate cancellations and
reductions in property and
marine (offshore energy)
More volatile XL book
slightly reduced
Portfolio shifts
Traditional portfolio is well diversified –
Earnings resilience sustained by higher share of proportional casualty
Facultative
9 (10)
XL
19 (20)
Proportional
72 (70)
TOTAL
€13bnTOTAL
€13bn
66Analysts' conference 2016
Reinsurance Property-casualty – Traditional portfolio
Active portfolio management to counterbalance the
challenging market environment
1
1 Bubble size reflects gross premiums written as at 31.12.2015 (grey) – Outlook 2016 (blue).
Low Economic profitability High
Lo
w P
ricin
g p
ressure
H
igh Expected profitability remains
highest in casualty lines due to high
share of
proportional business
customised solutions/highly
complex risks
Pricing pressure remains highest in
property nat cat XL, but profitability
is still above cost of capital overall
Pricing pressure has increased for
marine and aviation
Some sublines are below cost of
capital (e.g. offshore energy), but
carefully written considering client
relationship/potential
Traditional P-C portfolio – Outlook 20161
Credit
Property
nat cat XL
Property
without
nat cat XL
Casualty
without motor
Motor
AviationMarine
Total portfolio profitability still comfortably exceeds cost of capital
ILLUSTRATIVE
67Analysts' conference 2016
Reinsurance Property-casualty – Traditional portfolio – Property nat cat XL
Market dynamics are largely consistent with last year1
1 Bubble size reflects gross premiums written as at 31.12.2015 (grey) – Outlook 2016 (blue). 2 Incl. worldwide business.
Traditional P-C portfolio – Property nat cat XL – Outlook 20161
Nat cat rates continue to decline
on a world-wide basis
Deceleration of price declines only
observable for US/global cat
business
US business continues to be most
exposed to pricing pressure –
profitability expected to remain
around cost of capital
All other regions somewhat less
affected, but with increased pricing
pressure – profitability still (clearly)
above cost of capital
Portfolio shift towards growing and
highly profitable Latin America
Nat cat portfolio is actively managed and exceeds cost of capital
Europe
North America2
LA/Caribbean/
Rest of
world
Asia/Australia
Low Economic profitability High
Lo
w P
ricin
g p
ressure
H
igh ILLUSTRATIVE
68Analysts' conference 2016
Mature markets: Rising exposure and healthy demand
for tailored solutions create dynamics
Reinsurance Property-casualty – Portfolio growth
1
(Re)insurance growth drivers in mature markets
High level of poorly
insured/non-insured
traditional risks
New products and
national pool
solutions
Growing need for
capital optimisation
Rising demand for
complex programmes
and tailored solutions
Cyber protection gaps
Government-sponsored pools
Value concentration in cat-exposed regions
(e.g. coast lines)
Higher exposures from global supply chains
Opportunities/deals for Munich Re
Strong tailwind for additional,
profitable nat cat business to
be expected
Rising demand for cyber covers
UK flood cover (Flood Re)
UK terrorism cover (Pool Re)
Bundled reinsurance purchase
One-off effects from M&A activity
in insurance sector
Capitalisation (e.g. SII)
M&A protection
Rating requirements
Bespoke solutions for capital
optimisation and/or special
situations
Post-merger, large entities
strongly rely on Tier-1 reinsurers
Multinational, tailored solutions
Low levels of insurance and increasing need for individual reinsurance solutions are
the main growth drivers in mature markets
69Analysts' conference 2016
Emerging markets: Munich Re’s global expertise and
proximity to risks fit in well with clients’ buying motivation
Reinsurance Property-casualty – Portfolio growth
1
(Re)insurance growth drivers in emerging markets
1 Source: Artemis as of 14.01.2016 based on Chinese Ministry of Civil Affairs ($41bn of economic losses in 2015)/AON Benfield (insured losses from natural disasters in China in 2015 in the range of $1.5–2.0bn)
Economic
growth and
demographic
development
Regional
expansion
and product
development
Introduction
of risk-based
supervisory
regimes
Demand for
cat risk covers
(e.g. Worldbank)
Local presence, consultancy services and capital relief are differentiating pillars of
Munich Re’s partnering approach with clients in emerging markets
Strong regional footprint
Strategic partnership
Support for cedants in
regional expansion and
product development
Latin America Africa/Middle East
Leading reinsurer in South
Africa
Well-positioned to tap
long-term potential of
Sub-Saharan region
New nat cat schemes to
fight climate change impact
C-ROSS shifting demand from traditional
to more volatile lines of business (China) –
competitive advantage for onshore
reinsurers with consultative business model
Government-sponsored nat cat schemes –
only 4% of losses covered by (re)insurance
(China)1
Insurance reforms, branch underway (India)
Asia
70Analysts' conference 2016
Risk Solutions –
Track record of solid result delivery is confirmed
Reinsurance Property-casualty – Risk Solutions
2
Gross earned premiums1
89.690.8
94.1
87.9
83.8
88.690.3
2009 2010 2011 2012 2013 2014 2015
Combined ratio1
1 Management view, not comparable with IFRS reporting.
Highly valuable business segment with strong top- and bottom-line contribution –
Detaches Munich Re from the cycle in reinsurance
€bn % Underwriting result1 €bn
Drivers in 2015
Top-line driven by FX and organic growth of US specialty entities
Strong bottom-line supported by low major losses and reserve releases
Highest result contribution from Hartford Steam Boiler
Continuous development
of capabilities in specialty
and niche areas
2.93.4 3.4
3.8 4.0 4.2
5.0
2124 22 23 24 25
28
2009 2010 2011 2012 2013 2014 2015
Share in % oftotal P-C book
0.3 0.30.2
0.5
0.7
0.5 0.5
26
42
32
25
2009 2010 2011 2012 2013 2014 2015
Share in % oftotal P-C book
71Analysts' conference 2016
Risk Solutions – Growth initiativesReinsurance Property-casualty – Risk Solutions
2
Business unit Rationale
Organic growth in expertise-
driven specialty and niche
business
Initiative
Corporate
Insurance
Partner
(CIP)
Strengthened client focus through international
network and comprehensive lines of business in
industrial insurance
Green Tech Solutions: Performance guarantees
for broader spectrum of technologies
Specialty
markets
Organic growth with key clients: MGAs/PAs,
banks/brokers and alternative markets
Expansion into new market segments
(e.g. single commercial risks)
New product development (e.g. cyber)
Hartford
Steam
Boiler
(HSB)
International expansion of equipment breakdown
insurance in Asia and Europe
Continued white-labelling, collaborating with
American Modern Insurance Group (AMIG)
Intensified collaboration and joint
innovation between Risk Solutions
business providers
Focused multi-year investment
programme (systems and
processes) in business and
service providers to further
improve client centricity
Leveraging strengths within Risk Solutions while keeping a
“fleet of speedboats” for specialty and niche business
72Analysts' conference 2016
Munich Re utilising all ART channels as instrument for
risk management and an expanded product range
Reinsurance Property-casualty – Alternative risk transfer
Munich Re channels to tap alternative capacity sources
Additional cat bonds of
US$ 200m issued
(Queen Street X and XI)
Broadened investor base
for fully collateralised
cover of Munich Re
peak-zone risk
Queen Street programmeEden Re programme1
Sidecar was increased
by US$ 70m to
US$ 360m cat XL
capacity in 2015
Broader regional
coverage, including
Australia cat XL book
Combining Munich Re’s peak-risk competence and client access with institutional investors’ interest
in reinsurance risk
Taking advantage of new sources of capital for clients and Munich Re’s own book
Munich Re ILS service for third parties completes offer as customised stand-alone service or
integrated into traditional solutions
Enhanced risk management and client offerings on basis of ART channels
Retrocession – Protection per nat cat scenario2 €m
1 Munich Re structured and arranged transactions. 2 Including indemnity retrocession, ILW/derivatives, risk swaps, cat bonds and the sidecars Eden Re I+II. Selection of main scenarios.
Retrocession use reflects favourable market terms
and strong Munich Re capital base
0
500
1,000
1,500
2013 2014 2015 2016
Australia Cyclone US Windstorm NE US Windstorm SE
Broadened distribution channels to ART markets to increase flexibility of
Munich Re balance sheet – relationship-based approach allows for scaling-up
73Analysts' conference 2016
Munich Re drives innovation in four key areas –
Launches 2015 (selection)
Reinsurance Property-casualty – Innovation
Cyber solutions for broad range of risks
Cooperations with multiple cyber security
companies, enhancements of accumulation
models/products1
Non-damage business interruption
“NDBI Pharma IQ” insurance for R&D
of life-science companies
Business-enabling for start-ups
Insurance for cash-in of pre-IPO firms’
employee shares
Automation/digitalisation of processes
Data-analytics applications2 in underwriting
and claims
White-labelling solutions
“US Homeowners Inland Flood Coverage”
leverages synergies between HSB,
AMIG and Munich Re US
reinsurance division
Capital optimisation
“Capital Partners” combines structuring
and technical expertise for integrated
risk, financial and capital management
Public-sector climate-risk insurance
Successful renewal of “African Risk Capacity”
cat insurance pool
Primary insurance consulting
Dedicated consulting unit
Predictive/preventive services
Early loss and claims fraud detection
leverages data analytics
Claims service/assessment
Worldwide drones service
New (re)
insurance
products
New
business
models
New
risk-
related
services
New
clients
and
demands
Innovation-related business steadily growing –
currently generating a premium volume3 of ~€500m
1 e.g. Digit@all, CyberOne. 2 e.g. Fuzzy matching, text mining, natural language processing.3 Munich Re (Group).
74Analysts' conference 2016
126 135
191
2013 2014 2015
PIRI
Cyber (re)insurance – Securing profitable growth through
diversification, innovation and accumulation control
Reinsurance Property-casualty – Product innovation – Cyber (re-)insurance
Munich Re cyber portfolio1
Munich Re with leading-edge expertise and strong global market presence to
profitably exploit innovative cyber-insurance segments
Reinsurance (RI)
First-mover and global
market leader
Dynamic growth through joint
projects with cedants (including
white label products) in
developing markets
Steady increase of profitable
cyber portfolios in the US
Continuous update of our
accumulation models
(e.g. virus, cloud, critical
infrastructure)
Hartford Steam Boiler
Established US market for cyber
liability/privacy covers for SMEs and
individuals. Introducing HSB Total
Cyber for mid-size companies
Corporate Insurance Partner
Traditional and non-traditional cyber
solutions for large corporate clients.
Cooperation with IT providers for
holistic cyber protection
Primary insurance (PI)
Specialised single-risk taker
for a broad range of cyber risks
Bundling of cyber expertise in dedicated cyber unit
Market differentiation through talent acquisition
Systematic build-up of cyber exposure, loss and threat database
1 Premium development.2 Estimates based on different external sources (Marsh & McLennan, Barbican Insurance, Allianz).
US$m
CAGR
23%
Cyber insurance market2 US$bn
~3
~6–8
2015e 2020e
CAGR
~18%Munich Re well positioned
75Analysts' conference 2016
Innovation: Infrastructure for innovation activities is
fully in place and anchored in organisation
Reinsurance Property-casualty – Innovation
Data
analytics
Innovation
labs1
Scouting
and
partnering
Achievements Outlook
First reinsurer to establish
permanent presence in Silicon Valley
Innovation scouts networking in
relevant, global innovation centers
Understand the relevant start-up eco system
Establish corporate partnerships
Strategically evolve Munich Re business model
Munich Re is shaping the dynamic change of the industry –
Broad and decentral up-skilling of the organisation
1 Only reinsurance, some activities are joint with ERGO.2 Munich-based accelerator for tech start-ups.
Successful lab pilot with
TechFounders2
Munich Re-owned labs in Munich,
Beijing and New York
Environment to develop and test ideas
together with clients
Drastically reduce time-to-market through
learning effects
Building central and decentral
analytical capabilities
Investments in IT big data
infrastructure
Speed up and improve loss experience
Create new data insights
Create added value for cedants and Munich Re
(new products, new covers, new insights)
Prepare for data-driven business models
76Analysts' conference 2016
Agenda
Strong track record – and new ideas Nikolaus von Bomhard
Munich Re (Group) Jörg Schneider
Risk management Bernhard Kaufmann
ERGO Markus Rieß
Reinsurance Property-casualty Torsten Jeworrek
Reinsurance Life Joachim Wenning
Backup
77Analysts' conference 2016
Pleasing operating economic performanceReinsurance Life – Economic earnings
High new business value generation and positive development of in-force
Reinsurance Life – €bn 2015
Operating economic earnings 1.5
Expected return existing business 0.2
New business value 0.9
Operating variances existing business 0.2
Other operating variances 0.1
Economic effects 0.3
Other non-operating earning comp 0.1
Total economic earnings 1.8
New business value
Exceeding expectations, strong contribution
from North America and Asia
Financially-motivated reinsurance: again a
successful year
Traditional reinsurance: resilient to mounting
pressure on volumes and margins
Operating variances
Positive development of in-force in the
aggregate and in all major markets
Robust results in USA and Australia –
confidence that US old-issue-age mortality
and Australian disability have been fixed
Main drivers of operating economic earnings
78Analysts' conference 2016
Solid IFRS performance notwithstanding
random large claims
Reinsurance Life – IFRS key figures
9,48111,130 10,829 10,040 10,536
2011 2012 2013 2014 2015
Gross premiums written
Positive currency effects
Largely flat development of traditional business
Adjusted for two single large outlier claims in
North America, …
… performance in line with or slightly better
than expectations
Main effects 2015
26
58 5163 70
2011 2012 2013 2014 2015
354420
359280 335
2011 2012 2013 2014 2015
OtherMorbidityMortality
Parts of financially-motivated reinsurance
recognised outside the technical result
Performance fully in line with expectations
€m
Technical result €m
Fee income €m
79Analysts' conference 2016
Reinsurance Life – Current status of major markets
Benefit from growth opportunities
and closing open issues
Canada
Pressure on volumes
and margins increased
significantly in 2015 –
new business generation
has dropped
IFRS profits continue to
be strong
USA
High new business
value with attractive
risk-return profile
Legacy block will
continue to affect
IFRS profits
UK
Continued pressure on volumes/margins in
protection business
Successful proposition for financially motivated
reinsurance and longevity
Results from in-force portfolio continue to be healthy
Continental Europe
Challenging market environment limits value generation
Pleasing IFRS profit from healthy portfolio
Asia
Very satisfactory
development of
new business and in-
force portfolio
Product drift trend to
become challenging
Australia
Disability business
performing in line
with expectations
Transfer into new
business proposition
underway
Strong new business generation against pressure
from competition and challenging economic environment
80Analysts' conference 2016
Reinsurance Life – Portfolio and strategic focus
Well-diversified global portfolio
90%
10%Latin America
20%
80%
Australia
90%
10%
South Africa
Size of bubbles indicative of present value of future claims.
Weighting of North America still high – Strategic focus reflected in growth in Asia
Longevity
Morbidity
Mortality
39%
59%
Asia
40%
10%
50%
United Kingdom
60%40%
Canada
85%
15%
USA
45%
50%
5%
Continental Europe
ILLUSTRATIVE
81Analysts' conference 2016
Risk-return profile
Mortality risk dominates, while contribution from initiatives is increasing
Reinsurance Life – Portfolio and strategic focus
Core business supplemented by
well-established initiatives
Overweight
Neutral
Underweight
Unique
Compared to competitors
Risk
Retu
rn
Mortality
Asset
protection
Asia
Longevity
FinMoRe
LowerHigher
Lo
wer
Hig
her
Morbidity
Initiative portfolio
FinMoRe Asia
Asset protection
1 2
4Longevity3
Traditional business model
Portfolio dominated by mortality risk –
focus on improving risk-assessment process
for insurer and reinsurer
Growing exposure to morbidity risk –
need to secure alignment of interest of
policyholders, insurers and reinsurers
Confidence that US old-issue-age mortality
and Australian disability are fixed
ILLUSTRATIVE
82Analysts' conference 2016
Reinsurance Life – Strategic focus
5043
70 65 6625 49
49 62 70
75
92
119127
136
20 1928 37 41
2011 2012 2013 2014 2015
Fee income
Technical result
% of total
Demand will remain high
Number, size and type of transactions are difficult to
predict and will vary on an annual basis
Expectations going forward
Increasing result contribution an indicator of
overall success
Geographically well-diversified
2015 new business, particularly from Asia and Europe
First Solvency II solutions executed
Portfolio development
Gross premiums written
Financially Motivated Reinsurance €m
Technical result and fee income VNB1
Financially Motivated Reinsurance
Well-established value proposition – strong demand prevails
3,638
4,5364,109
3,356 3,313
38 41 3833 31
2011 2012 2013 2014 2015
% of total
185
82
129
73
214
29
14
2216
23
2011 2012 2013 2014 2015
% of total
1
1 2011–14 MCEV, 2015 Solvency II.
83Analysts' conference 2016
Reinsurance Life – Strategic focus
Asia €m
Asia
High new business value underpins business potential
Insurance and reinsurance markets will continue their
growth path – flattening growth rates to be expected
Demand for solvency relief and financing solutions
remains high
Increase in competition and pressure on prices, but
underwriting discipline remains high
Expectations going forward
Sustained growth path
Premium volatility from financially-motivated deals
Tailor-made market and client strategies
Growth supported by broad range of services
2015 exceptional year in terms of IFRS profit and
new business generation
Portfolio development
2
959
1,178
872 871 910
10 118 9 9
2011 2012 2013 2014 2015
% of total
4 5
9
35
5562 59
86
9 1215
1926
2011 2012 2013 2014 2015
Fee income
Technical result
% of total
56
8197 93
198
914
1721 21
2011 2012 2013 2014 2015
% of total
Gross premiums written Technical result and fee income VNB1
1 2011–14 MCEV, 2015 Solvency II.
84Analysts' conference 2016
Reinsurance Life – Strategic focus
Longevity
Book developed carefully in line with risk appetite
3
Gross premiums written
Longevity €m
Liabilities by deals
Evolutionary development of portfolio within clearly
defined risk tolerance
Careful investigation of expansion into other markets
High market potential but also significant pressure
on prices
Continuation of highly selective approach in
choosing transactions on which to quote
Expectations going forward
Portfolio comprises longevity swaps in UK
No significant VNB expectation
2014: Participation in the large AVIVA scheme
2015: One further transaction concluded with a
leading specialist life insurer
Portfolio development
Longevity considered to be
primarily a risk management tool
to balance mortality portfolio and
to stabilise earnings
Uncertainty around future
mortality trend requires prudent
approach in pricing and valuation
Strategic proposition
2153
120
312
381
3 4
2011 2012 2013 2014 2015
% of total
1,040887 982
2,788
1,366
2011 2012 2013 2014 2015
85Analysts' conference 2016
Reinsurance Life – Strategic focus
Asset protection
€mIFRS contribution margin1
Asset protection
Comprehensive solutions to complex financial risks
Existing book dominated by Asia/Japan
Current opportunities mainly in Europe and
Asia/Japan
Exploration of business potential in North America
Legal, regulatory and structuring expertise
Fully functional hedging platform
Strategic proposition
1 Part of non-technical-result, incl. insurance-related investment result.
Portfolio continues to gain significance
Growing contribution to new business value
Previous years positively affected by terminations in
the portfolio that caused an earlier-than-expected
margin release
4
Product portfolio
Solutions to Basel III and Solvency II needs
Resolution of accounting asymmetry
ALM solutions for smaller players
Development of modern savings products
Regional focusPortfolio development
7
30 30
37
26
2011 2012 2013 2014 2015
86Analysts' conference 2016
Europe
Australia
Asset
protection
AsiaLongevity
Strategic initiatives continue to show attractive growth/return perspective
Reinsurance Life – Portfolio development
Flat development of traditional reinsurance expected
FinMoRe
LA / Africa
Expected development of business relative to today
CanadaUS new
business
US back book
Growth
Re
turn
Initiative portfolio
Traditional business model
Attractive new business potential in the
USA – weight and earnings impact of
back-book will decrease over time
Relative and absolute size of Canadian
book difficult to maintain
Growth potential in Latin America and
Africa, but overall size is small
FinMoRe, Asia and asset protection:
Growth path to continue
Longevity:
Selective strategy to be pursued
ILLUSTRATIVE
87Analysts' conference 2016
Innovation has a top priority – all strategic pillars for
innovation addressed by concrete projects
Life innovation activities along key strategic pillars for innovation (selection)
Reinsurance Life – Strategic focus and innovation
Automation services (low- and high-end solutions
for underwriting and claims)
Predictive underwriting
Broker platform with underwriting rulebook included
for point-of-sale underwriting (Vers.diagnose)
1 e.g. Cover for inclusion of diabetes.2 UK-based digital group risk insurer. Life, income protection and critical illness cover.
Financially Motivated
Reinsurance
Solvency II solutions
(incl. market risks)
New
risk-
related
services
New
clients and
demands
Efficient
and digital
business
processes
Co-creation projects
with clients
Ellipse2
Various white
labelling projects
Fully re-insurable
variable annuities
Extension of insurability1
New (re)
insurance
products
New
business
models
Digital
customer
and sales
experience
88Analysts' conference 2016
Automated risk assessment platforms are an important
part of digitalisation in the (re)insurance industry
Reinsurance Life – Strategic focus and innovation
Benefits for
Munich Re
clients
Munich Re’s
achievements
and outlook
Automated risk assessment for life
insurance proposals for every point
of sale (multi-channel)
Unrivalled risk selection and pricing
Reduced administration costs
Practical, flexible and easy-to-use tool
Automated point-of sale underwriting
platform for life insurance and
occupational disability
Open architecture for insurance
companies and sales partners
(multi-channel-capable)
Easy-to-use, with greater
transparency for brokers and insureds
Core component in the value chain
of life insurers in a digital world
To be enhanced in the future with
big data and new analytics
Feasibility study on transferring
automated underwriting services
to property business
Automated risk assessment with
Munich Re underwriting rules
generating consistent results
Greater market penetration through
cooperation with additional life
insurers and additional life covers
New business models Munich Re
Automation Solution
New broker platform in Germany
vers.diagnose
89Analysts' conference 2016
Financial outlook 2016Reinsurance Life
IFRS technical result
354
420370
280335
2011 2012 2013 2014 2015
Actual Adjusted Target €400m
€m
Adjustments
2011/13/14: Australian disability
2014: US recapture settlement
2015: Outlier claims in North America
VNB1
643573 577
453
942
2011 2012 2013 2014 2015 SII
Actual Target €450m
Adjustments
Peaks in value generation from FinMoRe
2015: First-time application of SII methodology1;
extraordinarily high VNB in the US
1 2011–14 MCEV, 2015 Solvency II.
Confirm IFRS run-rate of around €400m per annum
90Analysts' conference 2016
Agenda
Strong track record – and new ideas Nikolaus von Bomhard
Munich Re (Group) Jörg Schneider
Risk management Bernhard Kaufmann
ERGO Markus Rieß
Reinsurance Property-casualty Torsten Jeworrek
Reinsurance Life Joachim Wenning
Backup
91Analysts' conference 2016
€m
Premium developmentBackup: Munich Re (Group) – Premium development
€mGross premiums written
Segmental breakdown
2014 48,848
Foreign-exchange effects 2,921
Divestment/investment 25
Organic change –1,420
2015 50,374
ERGO Property-casualty Germany
3,162 (6%) (▲ 1.5%)
ERGO Life/Health Germany
9,426 (19%) (▲ –3.9%)
ERGO International
3,947 (8%) (▲ 3.6%)
Reinsurance Property-casualty
17,680 (35%) (▲ 5.7%)
Reinsurance Life
10,536 (21%) (▲ 4.9%)Munich Health
5,623 (11%) (▲ 5.3%)
92Analysts' conference 2016
€m
3,242
4,014
2014 2015
8611,373
Q3 2015 Q4 2015
2015 2014
Total 3,122 3,170
Reinsurance 3,261 2,892
ERGO –227 169
Munich Health 88 109
€m
Net resultBackup: Munich Re (Group) – Financial highlights 2015
€mNet result
1 Other non-operating result, goodwill impairments, net finance costs, taxes.
€mInvestment result Other1Technical result
8,002 7,536
2014 2015
1,531 1,664
Q3 2015 Q4 2015
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015
–857
–1,698
2014 2015
–54–696
Q3 2015 Q4 2015
941 762 736 731 7901,076
525 731
93Analysts' conference 2016
Reconciliation of operating result with net resultBackup: Munich Re (Group)
€m
2015 Q4
Operating result 4,819 1,427
Other non-operating result –532 –8
Goodwill impairments –452 –452
Net finance costs –238 –60
Taxes –476 –175
Net result 3,122 731
Reconciliation of operating result with net result
Tax rates
2015 Q4
Group 13.2 19.3
Reinsurance 12.9 13.6
ERGO –0.6 4.6
Munich Health –11.9 176.4
2015 Q4
Foreign exchange –213 101
Restructuring charges –18 –4
Other –301 –105
Other non-operating result €m %
94Analysts' conference 2016
IFRS capital positionBackup: Munich Re (Group) – Capitalisation
€bnCapitalisation
1 Other debt includes bank borrowings of Munich Re and other strategic debt. 2 Strategic debt (senior, subordinated and other debt) divided by total capital (strategic debt + equity).
€m
Equity 31.12.2014 30,289 Change Q4
Consolidated result 3,122 731
Changes
Dividend –1,293 0
Unrealised gains/losses –1,821 62
Exchange rates 1,420 393
Share buy-backs –1,005 –316
Other 254 51
Equity 31.12.2015 30,966 921
Equity
EXCHANGE RATES
FX contribution mainly
driven by US$
UNREALISED GAINS/LOSSES
Fixed-interest securities
Q1–4: –€1,726m
Q4: –€498m
Non-fixed-interest securities
Q1–4: –€10m
Q4: +€585m
27.4 26.2 30.3 34.8 30.7 30.0 31.0
5.5 4.44.4
4.54.5 4.5 4.4
0.3 0.30.3
0.40.4 0.4 0.4
17.5% 15.3% 13.6% 12.3% 13.6% 13.8% 13.4%
2012 2013 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
Senior and other debt
Subordinated debt
Equity
1
Debt leverage2 (%)
95Analysts' conference 2016
ERGO – Premium development Backup: ERGO – Premium development
%Regional breakdown
€mSegmental breakdown€m
2014 16,736
Foreign-exchange effects –24
Divestments/investments 20
Organic change –197
2015 16,535
Gross premiums written
Life/Health
Germany
9,426 (57%)
(▲ –3.9%)
Property-casualty
Germany
3,162 (19%)
(▲ 1.5%)
International
3,947 (24%)
(▲ 3.6%)
€m
2014 16,736
Life/HealthGermany
–386
Property-casualtyGermany
47
International 138
2015 16,535
Gross premiums written
Rest of world
27
Germany
73
96Analysts' conference 2016
2014 2015
€m
ERGO Life/Health Germany – Key figures
1 Other non-operating result, goodwill impairments, net finance costs, taxes.
Backup: ERGO Life/Health Germany – Key figures
Net result
€m€mTechnical result Investment result €mOther1
144
383
2014 2015
4,4533,841
2014 2015
269
–329
225
–640
2014 2015
27 39 73 13051 54 28
–462
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015
97Analysts' conference 2016
Germany: Total premiums and new business
incl. direct business (statutory premiums)
1 Regular premiums +10% single premiums.
Backup: ERGO Life Germany – New business
Total premiums
€m 2015 2014
Δ
abs.
Δ
%
Gross premiums written 3,628 4,005 –377 –9.4
Statutory premiums 896 918 –22 –2.4
Total premiums 4,524 4,923 –399 –8.1
New business
€m 2015 2014
Δ
abs.
Δ
%
Total new business 986 1,215 –229 –18.9
Regular premiums 218 236 –18 –7.6
Single premiums 768 979 –211 –21.6
Annual premium equivalent (APE)1 295 334 –39 –11.8
98Analysts' conference 2016
2014 2015
176214
€m
ERGO Property-casualty Germany – Key figuresBackup: ERGO Property-casualty Germany – Key figures
1 Other non-operating result, goodwill impairments, net finance costs, taxes.
Net result
€m€mTechnical result Investment result €mOther1
68 5831 19 37
150
46
–19
214
122
2014 2015
–128
–4
2015 2015
204 187
2014 2015
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015
99Analysts' conference 2016
40.6
83.1 76.0 62.7 65.8 60.0 64.7
36.7
26.3 37.431.7 35.8
32.7 33.277.2
109.4 113.494.4 101.6
92.7 97.9
Personalaccident
Motor Fire/Property
Liability Legalprotection
Other Total
Cost ratioLoss ratio
ERGO Property-casualty Germany Backup: ERGO Property-casualty Germany
%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Combined ratio
Expense ratioLoss ratio
64.0 63.1 64.7
32.7 32.2 33.2
96.7 95.3 97.9
2013 2014 2015
94.095.7
101.3
95.4
95.4 95.3
93.5
97.198.1
93.4
96.1
103.9
€m
Combined ratio %
Gross premiums written
Personal accident
654
Liability
536
TOTAL
€3,162m
Other
336
Motor
663
Fire/Property
577
Legal protection
395
100Analysts' conference 2016
€m
ERGO Property-casualty Germany
%
649 666 663
2013 2014 2015
Personal accident Motor
€mGWP
81.2
75.3
77.2
2013 2014 2015
Combined ratio %GWP Combined ratio
106.3110.1 109.4
2013 2014 2015
LiabilityFire/Property
€m %
523 534 536
2013 2014 2015
€mGWP Combined ratio %GWP Combined ratio
85.689.0
94.4
2013 2014 2015
571 532 577
2013 2014 2015
108.6
101.0
113.4
2013 2014 2015
687 672 654
2013 2014 2015
Backup: ERGO Property-casualty Germany
101Analysts' conference 2016
2014 2015
€m
ERGO International – Key figuresBackup: ERGO International – Key figures
1 Other non-operating result, goodwill impairments, net finance costs, taxes.
Net result
€m€mTechnical result Investment result €mOther1
136
33
2014 2015
–554
–181
2014 2015
662
447
2014 2015
–276
–112
5814 48
–396
11 15 26
–163
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015
102Analysts' conference 2016
ERGO International property-casualty Backup: ERGO International property-casualty
%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Combined ratio
Expense ratioLoss ratio
60.8 58.5 65.3
37.9 38.839.4
98.7 97.3104.7
2013 2014 2015
99.2
98.097.2
100.4
94.9
97.5100.0
96.8
98.7
100.4104.1
115.3
Combined ratio %
€mGross premiums written
Poland
884
Greece
140
TOTAL
€2,392m
Other
366
Turkey
296
Legal protection
706
66.8
125.6
34.155.0 60.1 65.3
35.6
29.3
35.6
45.1 43.1 39.4
102.4
154.9
69.7
100.1 103.2 104.7
Poland Turkey Greece Legalprotection
Other Total
Cost ratio
Loss ratio
103Analysts' conference 2016
ERGO International property-casualty
€m
53 57 53
47 43 47
873 816 884
2013 2014 2015
Non-motor %Motor %
%
Poland Turkey
€mGWP1
96.0 97.7102.4
2013 2014 2015
Combined ratio %GWP1 Combined ratio
108.5
108.4
154.9
2013 2014 2015
GreeceLegal protection
€m % €mGWP1 Combined ratio %GWP Combined ratio
81.3
68.7 69.7
2013 2014 2015
649 652 706
2013 2014 2015
97.794.0
100.1
2013 2014 2015
58 5864
43 4236
225 232296
2013 2014 2015
Non-motor %Motor %
57 52 51
43 48 49
133 137 140
2013 2014 2015
Non-motor %Motor %
1 Excl. legal protection.
Backup: ERGO International property-casualty
104Analysts' conference 2016
International life: Total premiums and new business
(statutory premiums)
1 Regular premiums +10% single premiums.
Backup: ERGO International life – New business
Total premiums
€m 2015 2014
Δ
abs.
Δ
%
Gross premiums written 1,555 1,624 –69 –4.2
Statutory premiums 436 405 31 7.6
Total premiums 1,991 2,029 –38 –1.9
New business
€m 2015 2014
Δ
abs.
Δ
%
Total new business 1,001 1,051 –50 –4.7
Regular premiums 146 194 –48 –25.0
Single premiums 856 857 –1 –0.2
Annual premium equivalent (APE)1 231 280 –49 –17.5
105Analysts' conference 2016
Munich Health – Premium developmentBackup: Munich Health – Premium development
€mSegmental breakdown€m
2014 5,342
Foreign-exchange effects 289
Divestments/investments1 –34
Organic change 26
2015 5,623
Gross premiums written
€mGross premiums written
Reinsurance
4,333 (77%)
(▲ 6.8%)
Primary insurance
1,289 (23%)
(▲ 0.5%)
2014 5,342
Reinsurance 274
Primary insurance 6
2015 5,623
1 DKV Luxembourg.
Regional breakdown %
Europe and LA
32
North
America
54
Asia-Pacific
4
Middle East/
Africa
10
106Analysts' conference 2016
2014 2015
87
118
2014 2015
77
24
2014 2015
–9
9
2014 2015
Munich Health – Key figuresBackup: Munich Health – Key figures
€m
1 Other non-operating result, goodwill impairments, net finance costs, taxes.
Net result
€m€mTechnical result Investment result €mOther1
20 22
53
1423
15
46
5
109
88
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015
107Analysts' conference 2016
Reinsurance – Premium developmentBackup: Reinsurance – Premium development
€mSegmental breakdown
Life
10,536 (37%)
(▲ 4.9%)
Property-casualty
17,680 (63%)
(▲ 5.7%)
€m
2014 26,770
Foreign-exchange effects 2,656
Divestments/investments 39
Organic change –1,249
2015 28,216
Gross premiums written
€m
2014 26,770
Life 496
Property-casualty 950
2015 28,216
Gross premiums written Regional breakdown %
Latin America
4
North America
49
Europe
29
Middle East/Africa
3
Asia and Australasia
16
108Analysts' conference 2016
2014 2015
€m
Reinsurance Property-casualty – Key figuresBackup: Reinsurance Property-casualty – Key figures
Net result
€m€mTechnical result Investment result €mOther1
1 Other non-operating result, goodwill impairments, net finance costs, taxes.
–341–726
2014 2015
1,7852,046
2014 2015
2,392
3,116
2014 2015
2,4832,915
646 505 497835
597790
330
1,197
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015
109Analysts' conference 2016
%
Combined ratio
Combined ratio
%Combined ratio
Reserve releases1 €m %-points
2015 1,390 8.2
Q4 2015 889 20.9
TotalNat cat
Man-made
2015 6.2 0.9 5.3
Q4 2015 4.7 0.0 4.7
Ø Annual expectation ~12.0 ~8.5 ~3.5
Major losses %
Backup: Reinsurance Property-casualty – Combined ratio
1 Basic losses: releases in nearly all lines of business, mainly in fire and liability; adjusted for commission effects: 2015: ~€1,200m / 7.2%; Q4 2015: ~€700m / 16.5 %
Normalised
2013 92.1
2014 92.7
2015 89.7 ~98.7
Q4 2015 78.6 ~98.4
Expense ratioBasic losses Major losses
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015
86.9
101.4
91.3
91.2
92.3
93.3 94.5
78.6
51.3
53.0
50.8
36.8
10.4
7.2
6.2
4.7
30.4
32.5
32.6
37.1
110Analysts' conference 2016
%
0.6
7.9 7.6
2.9
0.9 7.3
2.5 2.7 1.6 0.5 1.5 0.0
2.07.3 7.2
6.3
0.1
8.13.9 3.4 4.6 4.3
7.74.7
Nat cat ratio
Man-made ratio
Development of combined ratioBackup: Reinsurance Property-casualty – Combined ratio
%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2014 2015
Combined ratio vs. basic losses
Nat cat vs. man-made
85.799.3 94.3 89.3 86.9
101.491.3 91.2 92.3 93.3 94.5
78.6
54.1 53.9 49.3 47.8 55.9 54.6 55.3 46.4 54.9 57.6 54.136.8
Combined ratio
Basic loss ratio
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2014 2015
111Analysts' conference 2016
Attractive business opportunities overcompensate for
premium decline due to consistent cycle management
% 100 –10.8 89.2 –1.3 12.8 100.7
€m 9,138 –982 8,156 –123 1,171 9,204
Total renewablefrom 1 January
Cancelled Renewed Decrease onrenewable
New business Estimatedoutcome
Backup: Reinsurance Property-casualty – January renewals 2016
January renewals 2016
1 Price movement is risk-adjusted, i.e. includes claims inflation/loss trend and is adjusted for portfolio mix effects. Furthermore, price movement is calculated on a wing-to-wing basis (incl. cancelled and new business).
Ongoing strict bottom-line focus to maintain portfolio quality
in a very competitive market environment
Change in premium +0.7%
Thereof price movement1 ~ –1.0%
Thereof change in exposure for our share +1.7%
112Analysts' conference 2016
Backup: Reinsurance Property-casualty – January renewals 2016
Renewal results
Year-to-date price change 2010–2016 %
–0.1
1.0
2.4
0.2
–2.4
–1.6
–1.0
0.30.5
1.4
0.0
–1.7–1.9
–1.0
2010 2011 2012 2013 2014 2015 2016
Nominal Adjusted for interest-rate changes
1
1 January renewals.
113Analysts' conference 2016
Split by line of business
45 47
38 38
9 85 53
2
2015 2016
Split by region %
31 32
28 26
17 17
21 21
3 4
2015 2016
January renewals 2016 –
Split by line of business and region
Aviation
Credit
Marine
Casualty
Property
Worldwide
Latin America
Asia/Pacific/Africa
North America
Europe
Backup: Reinsurance Property-casualty – January renewals 2016
Further slight increase in share of casualty business,
while regional allocation remains relatively stable overall
%
114Analysts' conference 2016
Response to benign emergence of basic losses in line
with considered judgement
Backup: Reinsurance Property-casualty – Reserves
1 Aviation, credit and marine.2 Reserve releases shown are adjusted for commission effects (sliding scales in motor).
Reserve release
Casualty
Specialty1
Property
Actual vs. expected Business rationaleChanges in projection
Reserve release
Reserve release
Favourable actual vs. expected judged as credible
Positive actual vs. expected indications
Relatively quick development of short-tail lines
Releases in fire, engineering and other property as
loss development was benign across all portfolios
Relatively small reserve release
Favourable indications across all lines
Releases2 mainly in third-party liability
Favourable actual vs. expected led to reserve
releases
Favourable indications across all lines
Reserve releases primarily in marine and credit,
following benign loss emergence
115Analysts' conference 2016
Asbestos and environmental
survival ratio 31 December 2015
Munich Re (Group) – Net definitive as at 31 December 2015
Backup: Reserves
€m
Non-€ currencies converted at rate of exchange year-end 2015.
Asbestos Environmental A&E total
Paid 2,835 953 3,788
Case reserves 713 115 828
IBNR 987 232 1,219
Total reserves 1,700 347 2,047
3-year average annual paid losses 129 20 149
Survival ratio 3-year average 13.1 17.7 13.7
116Analysts' conference 2016
2014 2015
409
345
122 124
34
12971 52 49
174
€m
Reinsurance Life – Key figuresBackup: Reinsurance Life – Key figures
Net result
€m€mTechnical result Investment result €mOther1
1 Other non-operating result, goodwill impairments, net finance costs, taxes.
811898
2014 2015
–50
–155
2014 2015
279335
2014 2015
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015
117Analysts' conference 2016
Payback period2RoRaC spread1
Backup: Reinsurance Life – New business profitability
Global Life – New business profitability
Increased share of FinMoRe
business (usually of shorter
duration) decreases payback
period of 2015 new business
Very good new business
profitability relative to economic
risk capital (RoRaC spread)
Relatively higher profitability
drives the increased RoRaC
spread (level of economic risk
capital comparable to 2014)
IRR spread1
New business profitability
relative to total investment in
new business (IRR spread)
influenced by increased level of
supervisory capital (impact of
Solvency II) and tailor-made re-
insurance solutions (FinMoRe)
0
5
10
15
20
2011 2012 2013 2014 2015
0%
5%
10%
15%
20%
2011 2012 2013 2014 2015
0%
5%
10%
15%
20%
2011 2012 2013 2014 2015
% % years
1 Spread in addition to reference rate (weighted-average swap yield curves), after tax. 2 Number of years it takes to amortise the total investment in new business through future (undiscounted) earnings distributable to shareholders.
118Analysts' conference 2016
Investment portfolio Backup: Munich Re (Group) – Investment portfolio
%Investment portfolio1
Land and buildings
2.9 (2.4)
Fixed-interest
securities
55.7 (55.5)Shares, equity funds and
participating interests2
5.2 (5.2)
Loans
28.7 (29.2)
TOTAL
€231bnMiscellaneous3
7.5 (7.7)
Portfolio management in Q4
Purchase of government bonds in the US,
Spain and emerging markets
Sale of French and Spanish covered
bonds
Reduction of corporate bonds and
structured products
Increase of equity exposure net of hedges
Duration1
Reinsurance
ERGO
Munich Re (Group)
Assets Liabilities
5.4 (5.6)
8.4 (8.3)
7.3 (7.4)
4.8 (4.6)
9.1 (9.2)
7.4 (7.4)
DV011,4 €m
41 (41)
111 (113)
151 (153)
44 (40)
126 (130)
170 (170)
Assets Liabilities
–2.9
–15.4
–18.3
Net
1Fair values as at 31.12.2015 (31.12.2014). 2 Net of hedges: 4.8% (4.3%). 3 Deposits retained on assumed reinsurance, deposits with banks, investment funds (excl. equities), derivatives and investments in renewable energies and gold. 4 Market value change due to a parallel downwardshift in yield curve by one basis point considering the portfolio size of assets and liabilities (pre-tax). Negative net DV01 means rising interest rates are beneficial.
119Analysts' conference 2016
Breakdown of regular income
Actual 2015
Backup: Munich Re (Group) – Investments
Investment result –
Regular income (€m)
Q3
2015
Q4
2015 2015 2014 Change
Afs fixed-interest 856 867 3,528 3,596 –68
Afs non-fixed-interest 104 101 618 471 146
Derivatives 32 34 137 68 69
Loans 522 524 2,098 2,190 –92
Real estate 91 125 393 349 44
Other investments 120 131 597 529 68
Total 1,725 1,782 7,370 7,203 167
€m Regular income
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2014 2015
1,783
1,999
1,8431,796
1,697
1,907
1,773
1,826
1,801
2,062
1,725
1,782
€1,833mAverage
120Analysts' conference 2016
Breakdown of write-ups/write-downs
Actual 2015
Write-ups/write-downs€m
–88
–175
–8
–165
–15 0–88 –131
–151
–89
–413
–101
–€119mAverage
Investment result –
Write-ups/write-downs (€m)
Q3
2015
Q4
2015 2015 2014 Change
Afs fixed-interest –27 5 –51 –12 –39
Afs non-fixed-interest –343 –70 –488 –145 –343
Loans 0 20 –45 2 –47
Real estate –21 –7 –65 –54 –10
Other investments –22 –50 –106 –25 –81
Total –413 –101 –754 –234 –520
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2014 2015
Backup: Munich Re (Group) – Investments
121Analysts' conference 2016
Breakdown of net result from disposals
Actual 2015
€m
446 385 392536 517
687
479
946 997810
514372
€620mNet result from disposals Average
Investment result –
Net result from disposal of investments (€m)
Q3
2015
Q4
2015 2015 2014 Change
Afs fixed-interest 251 205 1,413 1,186 226
Afs non-fixed-interest 20 228 1,018 1,178 –160
Loans 23 10 103 213 –110
Real estate 0 0 5 20 –14
Other investments 220 –71 155 32 123
Total 514 372 2,693 2,628 65
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2014 2015
Backup: Munich Re (Group) – Investments
122Analysts' conference 2016
Return on investment by asset class and segment
Actual 2015
1 Including management expenses.
% Regular income
Write-ups/-downs
Disposal result
Extraord. derivative result
Other inc./exp. RoI
ᴓ Market value (€m)
Afs fixed-income 2.7 0.0 1.1 0.0 0.0 3.7 131,920
Afs non-fixed-income 4.2 –3.3 6.9 0.0 0.0 7.8 14,676
Derivatives 6.6 0.0 0.0 –58.5 –0.4 –52.4 2,094
Loans 3.1 –0.1 0.2 0.0 0.0 3.2 68,028
Real estate 6.5 –1.1 0.1 0.0 0.0 5.5 6,031
Other1 4.0 –0.7 1.0 0.0 –3.6 0.7 15,101
Total 3.1 –0.3 1.1 –0.5 –0.2 3.2 237,851
Reinsurance 3.0 –0.4 1.8 –0.9 –0.3 3.2 91,052
ERGO 3.2 –0.3 0.7 –0.3 –0.2 3.1 142,728
Munich Health 2.2 –0.1 0.9 0.0 –0.1 2.9 4,071
3.4%
3.1%
3.5% 3.4%3.7%
4.3%
3.0%
3.4%
3.0%
4.1%
2.6%
3.2%
3.4%% Return on investment Average
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2013 2014 2015
Backup: Munich Re (Group) – Investments
123Analysts' conference 2016
Investment result
1 Annualised return on quarterly weighted investments (market values) in %. 2 Result from derivatives without regular income and other income/expenses. 3 Thereof interest-rate hedging ERGO Q1-4: –€128m/–€18m (gross/net).
Investment result €m
2015 Return1 2014 Return1 Q4 2015 Return1 Q3 2015 Return1
Regular income 7,370 3.1% 7,203 3.2% 1,782 3.1% 1,725 2.9%
Write-ups/write-downs –754 –0.3% –234 –0.1% –101 –0.2% –413 –0.7%
Disposal gains/losses 2,693 1.1% 2,629 1.2% 372 0.6% 514 0.9%
Derivatives2 –1,226 –0.5% –1,068 –0.5% –227 –0.4% –160 –0.3%
Other income/expenses –548 –0.2% –528 –0.2% –162 –0.3% –135 –0.2%
Investment result 7,536 3.2% 8,002 3.6% 1,664 2.9% 1,531 2.6%
Total return 0.9% 10.9% 1.4% 2.9%
Write-ups/write-downs 2015
Q42015
Fixed income
–96 25
Equities –488 –70
Real estate –65 –7
Other –105 –49
Disposal gains/losses 2015
Q42015
Fixed income 1,515 215
Equities 1,018 228
Other 160 –71
Derivatives2015
Q42015
Fixed income3 –249 –26
Equities –555 –172
Commodities –302 –74
Inflation –114 34
Other –6 12
3-month reinvestment yield
Q4 2015 1.8%
Q3 2015 1.9%
Q2 2015 2.1%
Backup: Munich Re (Group) – Investments
124Analysts' conference 2016
Investment result by segment
€mInvestment result – Reinsurance – Life
€mInvestment result – Reinsurance – Property-casualty
2015 Return1 2014 Return1 Q4 2015 Return1 Q3 2015 Return1
Regular income 898 3.4% 805 3.4% 233 3.6% 213 3.2%
Write-ups/write-downs –68 –0.3% –19 –0.1% –10 –0.2% –42 –0.6%
Disposal gains/losses 265 1.0% 310 1.3% 52 0.8% 22 0.3%
Derivatives2 –145 –0.6% –237 –1.0% 9 0.1% –76 –1.1%
Other income/expenses –53 –0.2% –48 –0.2% –15 –0.2% –13 –0.2%
Investment result 898 3.4% 811 3.4% 270 4.2% 104 1.6%
Average market value 26,094 23,859 25,796 26,306
2015 Return1 2014 Return1 Q4 2015 Return1 Q3 2015 Return1
Regular income 1,827 2.8% 1,710 2.8% 427 2.7% 410 2.6%
Write-ups/write-downs –312 –0.5% –134 –0.2% –59 –0.4% –187 –1.2%
Disposal gains/losses 1,373 2.1% 1,532 2.6% 246 1.5% 291 1.8%
Derivatives2 –636 –1.0% –1,140 –1.9% 48 0.3% –344 –2.2%
Other income/expenses –207 –0.3% –183 –0.3% –66 –0.4% –50 –0.3%
Investment result 2,046 3.1% 1,785 3.0% 595 3.7% 120 0.7%
Average market value 64,957 59,668 63,767 64,023
1 Return on quarterly weighted investments (market values) in % p.a.2 Result from derivatives without regular income and other income/expenses.
Backup: Munich Re (Group) – Investments
125Analysts' conference 2016
Investment result by segment
€mInvestment result – ERGO Life/Health Germany
€mInvestment result – ERGO Property-casualty Germany
1 Return on quarterly weighted investments (market values) in % p.a.2 Result from derivatives without regular income and other income/expenses.
2015 Return1 2014 Return1 Q4 2015 Return1 Q3 2015 Return1
Regular income 3,853 3.3% 3,880 3.5% 930 3.2% 906 3.1%
Write-ups/write-downs –196 –0.2% –56 –0.1% –24 –0.1% –93 –0.3%
Disposal gains/losses 753 0.6% 555 0.5% 72 0.2% 183 0.6%
Derivatives2 –330 –0.3% 318 0.3% –211 –0.7% 228 0.8%
Other income/expenses –239 –0.2% –244 –0.2% –68 –0.2% –62 –0.2%
Investment result 3,841 3.2% 4,453 4.0% 699 2.4% 1,162 4.0%
Average market value 118,427 110,968 116,928 116,437
2015 Return1 2014 Return1 Q4 2015 Return1 Q3 2015 Return1
Regular income 195 2.7% 198 2.8% 44 2.4% 48 2.6%
Write-ups/write-downs –107 –1.5% –14 –0.2% 1 0.1% –74 –4.1%
Disposal gains/losses 174 2.4% 115 1.6% 12 0.7% –1 –0.1%
Derivatives2 –58 –0.8% –76 –1.1% –36 –2.0% 1 0.1%
Other income/expenses –17 –0.2% –19 –0.2% –5 –0.3% –4 –0.2%
Investment result 187 2.6% 204 2.9% 16 0.9% –30 –1.7%
Average market value 7,305 7,108 7,153 7,260
Backup: Munich Re (Group) – Investments
126Analysts' conference 2016
Investment result by segment
€mInvestment result – ERGO International
€mInvestment result – Munich Health
1 Return on quarterly weighted investments (market values) in % p.a.2 Result from derivatives without regular income and other income/expenses.
2015 Return1 2014 Return1 Q4 2015 Return1 Q3 2015 Return1
Regular income 506 3.0% 528 3.1% 124 3.3% 125 2.8%
Write-ups/write-downs –69 –0.4% 4 0.0% –8 –0.2% –17 –0.4%
Disposal gains/losses 92 0.5% 91 0.5% –16 –0.4% 16 0.4%
Derivatives2 –57 –0.3% 67 0.4% –37 –1.0% 31 0.7%
Other income/expenses –26 –0.2% –28 –0.1% –6 –0.2% –5 –0.1%
Investment result 447 2.6% 662 3.9% 57 1.5% 150 3.4%
Average market value 16,996 17,164 15,199 17,678
2015 Return1 2014 Return1 Q4 2015 Return1 Q3 2015 Return1
Regular income 90 2.2% 82 2.2% 24 2.4% 23 2.2%
Write-ups/write-downs –2 –0.1% –15 –0.4% –1 –0.1% 0 0.0%
Disposal gains/losses 36 0.9% 26 0.7% 5 0.5% 3 0.3%
Derivatives2 0 0.0% 0 0.0% 0 0.0% 0 0.0%
Other income/expenses –5 –0.1% –6 –0.2% –2 –0.1% –1 –0.1%
Investment result 118 2.9% 87 2.3% 27 2.6% 25 2.4%
Average market value 4,071 3,759 4,106 4,092
Backup: Munich Re (Group) – Investments
127Analysts' conference 2016
Investment portfolio
Fixed-interest securities and miscellaneous
1 Approximation – Not fully comparable with IFRS figures. Fair values as at 31.12.2015 (31.12.2014).
%Investment portfolio
Fixed-interest securities
55.7 (55.5)
Loans
28.7 (29.2)
TOTAL
€231bn
Miscellaneous
7.5 (7.7)
%Miscellaneous
TOTAL
€17bn
Deposits on reinsurance
42 (49)
Bank deposits
22 (19)
Investmentfunds
11 (12)
Derivatives
9 (6)
Other
16 (14)
%
%
Pfandbriefe/
covered bonds
15 (18)
Corporates
16 (15)
Banks
3 (3)
Governments/
semi-government
62 (59)
TOTAL
€128bn
Structured products
4 (5)
Loans1
Loans to policyholders/
mortgage loans
10 (9)
Pfandbriefe/
covered bonds
46 (47)Banks
4 (4)
Governments/
semi-government
39 (39)
TOTAL
€66bn
Fixed-interest securities1
Corporates
1 (1)
Backup: Munich Re (Group) – Investments
128Analysts' conference 2016
Fixed-income portfolio
Total
%Fixed-income portfolio
TOTAL
€203bn
Loans to policyholders/
mortgage loans
3 (3)
Governments/
semi-government
52 (50)
Pfandbriefe/
covered bonds
24 (27)
Structured products
2 (3)
Corporate bonds
10 (10)
Bank bonds
3 (3)
Cash/other
4 (4)
Approximation – Not fully comparable with IFRS figures. Fair values as at 31.12.2015 (31.12.2014).
Backup: Munich Re (Group) – Investments
129Analysts' conference 2016
Fixed-income portfolio
Total
<BB
0 (0)
Approximation – Not fully comparable with IFRS figures. Fair values as at 31.12.2015 (31.12.2014). 1 Mainly loans to policyholders, mortgage loans and bank deposits.
%
%Regional breakdown
Without With Total
policyholderparticipation
31.12.2015
31.12.2014
Germany 4.6 24.6 29.2 30.3
US 14.9 1.5 16.4 14.0
France 2.1 5.2 7.3 7.6
UK 3.5 2.6 6.1 6.1
Netherlands 1.0 2.9 4.0 4.4
Canada 3.5 0.3 3.8 3.6
Supra-nationals
0.6 2.8 3.4 3.7
Spain 1.6 1.8 3.3 3.5
Ireland 0.6 1.9 2.5 2.4
Australia 1.9 0.6 2.5 2.2
Italy 1.1 1.3 2.4 3.3
Austria 0.3 1.7 2.1 2.5
Belgium 0.5 1.3 1.8 1.6
Sweden 0.2 1.4 1.6 1.8
Norway 0.3 1.2 1.6 1.7
Other 7.5 4.4 11.9 11.3
Total 44.5 55.5 100.0 100.0
>10 years
35 (35)
%Rating structure
Maturity structure
0–1 years
9 (8)
1–3 years
13 (14)
3–5 years
14 (14)
5–7 years
11 (12)7–10 years
16 (15)
AVERAGE
MATURITY
9.1 years
NR1
6 (6)
BB
2 (2)
BBB
12 (12)
AAA
42 (42)
AA
27 (26)
A
10 (12)
TOTAL
€202.9bn
n.a.
2 (2)
Backup: Munich Re (Group) – Investments
130Analysts' conference 2016
Fixed-income portfolio
Governments/semi-government
<BB
0 (0)
Approximation – Not fully comparable with IFRS figures. Fair values as at 31.12.2015 (31.12.2014).
% Regional breakdown %Rating structure
%Maturity structure
0–1 years
9 (7)
1–3 years
12 (13)
3–5 years
13 (13)
5–7 years
8 (10)7–10 years
14 (13)
>10 years
44 (44)
AVERAGE
MATURITY
10.8 years
Without With Total
policyholderparticipation
31.12.2015
31.12.2014
Germany 4.2 23.2 27.4 29.6
US 17.9 1.0 18.9 15.6
Supra-nationals
1.2 5.4 6.6 7.3
Canada 5.1 0.2 5.2 5.5
UK 4.8 0.2 4.9 4.7
Spain 1.5 2.0 3.5 3.2
France 1.8 1.7 3.5 3.2
Italy 1.4 1.7 3.1 4.3
Belgium 0.8 2.2 3.1 2.9
Australia 2.8 0.0 2.9 3.0
Austria 0.4 2.2 2.6 3.3
Poland 1.4 0.5 1.9 1.6
Ireland 0.4 1.5 1.9 1.7
Netherlands 0.6 1.1 1.7 2.0
Portugal 0.4 0.0 0.4 0.1
Other 7.9 4.4 12.3 12.0
Total 52.6 47.4 100.0 100.0
BB
2 (1)
BBB
10 (11)
AAA
46 (46)
AA
35 (35)
A
8 (7)
TOTAL
€105.7bn
Backup: Munich Re (Group) – Investments
131Analysts' conference 2016
Fixed-income portfolio
Pfandbriefe/covered bonds
<BB and NR
0 (0)<BB and NR
0 (0)
BB
0 (0)
Approximation – Not fully comparable with IFRS figures. Fair values as at 31.12.2015 (31.12.2014).
%Regional breakdown
31.12.2015 31.12.2014
Germany 34.2 34.7
France 18.5 18.6
UK 8.5 8.4
Netherlands 7.1 6.8
Sweden 5.9 5.9
Norway 5.7 5.5
Spain 4.8 6.2
Ireland 2.9 3.1
Italy 1.2 1.3
Other 11.1 9.5
%
BBB
3 (3)
A
5 (11)
AA
26 (25)
AAA
66 (61)
TOTAL
€49.6bn
Rating structure
%Maturity structure
0–1 years
5 (5)
1–3 years
10 (13)
3–5 years
13 (11)
5–7 years
14 (13)7–10 years
22 (20)
>10 years
35 (38)
AVERAGE
MATURITY
8.0 years
Cover pools
Mixed and other
11 (11)
Public
32 (32)
Mortgage
57 (57)
TOTAL
€49.6bn
%
Backup: Munich Re (Group) – Investments
132Analysts' conference 2016
Fixed-income portfolio
Corporate bonds (excluding bank bonds)
Approximation – Not fully comparable with IFRS figures. Fair values as at 31.12.2015 (31.12.2014).
%
<NR
1 (0)
<BB
2 (2)
BB
11 (11)
BBB
48 (46)
AAA
1 (1)
AA
7 (6)
A
30 (34)
TOTAL
€20.5bn
Rating structure
%Maturity structure
0–1 years
6 (6)
1–3 years
23 (19)
3–5 years
22 (22)5–7 years
18 (19)
7–10 years
15 (18)
>10 years
16 (16)
AVERAGE
MATURITY
7.5 years
%Sector breakdown
31.12.
2015
31.12.
2014
Utilities 21.1 22.3
Industrial goods and services 12.7 12.1
Oil and gas 10.9 12.2
Telecommunications 8.5 9.5
Financial services 7.9 5.4
Healthcare 6.7 5.9
Media 4.5 4.4
Food and beverages 4.1 4.7
Retail 3.9 3.7
Technology 3.5 3.6
Basic resources 3.5 3.6
Automobiles 2.8 2.7
Personal and household goods 2.7 2.5
Other 7.2 7.4
Backup: Munich Re (Group) – Investments
133Analysts' conference 2016
Fixed-income portfolio
Bank bonds
1 Classified as Tier-1 and upper Tier-2 capital for solvency purposes. 2 Classified as lower Tier-2 and Tier-3 capital for solvency purposes. Approximation – Not fully comparable with IFRS figures. Fair values as at 31.12.2015 (31.12.2014).
%Regional breakdown
%Investment category of bank bonds
%
NR
2 (2)
BB
7 (5)
BBB
40 (25)
AAA
0 (1)
AA
8 (8)
A
41 (56)
TOTAL
€7.1bn
Rating structure
%Maturity structure
0–1 years
11 (8)
1–3 years
36 (23)
3–5 years
25 (39)5–7 years
13 (14)
7–10 years
10 (11)
>10 years
5 (5)
AVERAGE
MATURITY
3.9 years
Senior
79 (81)
TOTAL
€7.1bn
Loss-bearing1
6 (5)
Subordinated2
15 (14)
Total
Senior
bonds
Sub-
ordinated
Loss-
bearing
31.12.
2015
31.12.
2014
US 29.3 7.2 0.3 36.7 29.0
Germany 18.7 2.5 3.2 24.3 29.2
UK 6.4 2.0 0.3 8.7 12.0
Ireland 5.9 0.1 0.0 6.0 5.0
France 1.8 1.0 1.2 3.9 2.8
Australia 2.8 0.0 0.0 2.8 3.1
Canada 1.9 0.7 0.0 2.6 3.0
Jersey 1.7 0.0 0.0 1.7 2.0
Austria 1.0 0.6 0.0 1.6 1.7
Other 9.5 1.4 0.7 11.6 12.2
<BB
2 (3)
Backup: Munich Re (Group) – Investments
134Analysts' conference 2016
Fixed-income portfolio
Structured products
Structured products portfolio (at market values): Breakdown by rating and region €m
1 Consumer loans, auto, credit cards, student loans. 2 Asset-backed CPs, business and corporate loans, commercial equipment. Approximation – Not fully comparable with IFRS figures. Fair values as at 31.12.2015.
Rating Region
Total
Market-
to-parAAA AA A BBB <BBB NR
USA +
RoW Europe
ABS Consumer-related ABS1 343 270 53 5 0 0 329 343 672 101%
Corporate-related ABS2 4 119 93 35 2 0 0 253 253 100%
Subprime HEL 0 0 1 0 0 0 1 0 1 98%
CDO/
CLNSubprime-related 0 0 0 0 0 0 0 0 0 0%
Non-subprime-related 455 684 95 2 0 51 194 1,093 1,287 98%
MBS Agency 1,116 68 0 0 0 0 1,184 0 1,184 104%
Non-agency prime 225 174 45 22 0 0 20 446 466 100%
Non-agency other
(not subprime) 133 95 35 20 1 0 11 273 284 99%
Commercial MBS 392 38 107 34 9 0 359 221 580 101%
Total 31.12.2015 2,668 1,450 430 116 12 51 2,099 2,628 4,727 100%
In % 56% 31% 9% 2% 0% 1% 44% 56% 100%
Total 31.12.2014 3,374 1,313 974 255 29 47 2,710 3,282 5,992 101%
Backup: Munich Re (Group) – Investments
135Analysts' conference 2016
Sensitivities to interest rates, spreads and
equity markets
1 Rough calculation with limited reliability assuming unchanged portfolio as at 31.12.2015. After rough estimation of policyholder participation and deferred tax; linearity of relations cannot be assumed. Approximation – Not fully comparable with IFRS figures.
2 Sensitivities to changes of spreads are calculated for every category of fixed-interest securities, except government securities with AAA ratings.
3 Worst-case scenario assumed including commodities: Impairment as soon as market value is below acquisition cost. Approximation – Not fully comparable with IFRS figures.
Sensitivity to risk-free interest rates – Basis points –50 –25 +50 +100
Change in gross market value (€bn) +8.2 +4.0 –7.9 –15.4
Change in on-balance-sheet reserves, net (€bn)1 +1.9 +0.9 –1.8 –3.4
Change in off-balance-sheet reserves, net (€bn)1 +0.4 +0.2 –0.4 –0.9
P&L impact (€bn)1 –0.0 –0.0 –0.0 –0.0
Sensitivity to spreads2 (change in basis points) +50 +100
Change in gross market value (€bn) –5.7 –11.1
Change in on-balance-sheet reserves, net (€bn)1 –1.1 –2.1
Change in off-balance-sheet reserves, net (€bn)1 –0.3 –0.6
P&L impact (€bn)1 –0.1 –0.2
Sensitivity to equity and commodity markets3 –30% –10% +10% +30%
EURO STOXX 50 (3,268 as at 31.12.2015) 2,288 2,941 3,595 4,248
Change in gross market value (€bn) –4.5 –1.5 +1.5 +4.7
Change in on-balance-sheet reserves, net (€bn)1 –1.0 –0.4 +0.8 +2.5
Change in off-balance-sheet reserves, net (€bn)1 –0.7 –0.2 +0.2 +0.7
P&L impact (€bn)1 –1.9 –0.6 +0.1 +0.4
Backup: Munich Re (Group) – Investments
136Analysts' conference 2016
€m 31.12.
2012
31.12.
2013
31.12.
2014
30.9.
2015
31.12.
2015
Market value of investments 218,047 210,431 235,849 235,372 230,529
Total reserves 22,478 15,192 31,470 26,839 25,969
On-balance-sheet reserves
Fixed-interest securities 9,980 4,661 11,967 9,286 7,886
Non-fixed-interest securities 1,503 1,975 2,270 1,603 2,446
Other on-balance-sheet reserves1 291 292 311 228 201
Subtotal 11,774 6,928 14,548 11,117 10,533
Off-balance-sheet reserves
Real estate2 1,519 1,763 2,006 2,068 2,273
Loans and investments (held to maturity) 8,831 6,071 14,400 13,232 12,610
Associates 354 430 516 422 553
Subtotal 10,704 8,264 16,922 15,722 15,436
Reserve ratio 10.3% 7.2% 13.3% 11.4% 11.3%
1 Unrealised gains/losses from unconsolidated affiliated companies, valuation at equity and cash-flow hedging.2 Excluding reserves from owner-occupied property.
On- and off-balance-sheet reserves (gross)Backup: Munich Re (Group) – Investments
137Analysts' conference 2016
On-balance-sheet reserves
€m
31.12.
2015
Change
Q4
Investments afs 10,332 –557
Valuation at equity 91 –2
Unconsolidated affiliated enterprises 81 –23
Cash-flow hedging 29 –2
Total on-balance-sheet reserves (gross) 10,533 –584
Provision for deferred premium refunds –4,900 330
Deferred tax –1,409 156
Minority interests –19 1
Consolidation, currency effects & IFRS 5 –22 155
Shareholders' stake 4,183 58
On-balance-sheet reserves
Backup: Munich Re (Group) – Investments
138Analysts' conference 2016
Off-balance-sheet reserves
1 Excluding reserves for owner-occupied property.
€mOff-balance-sheet reserves
31.12.
2015
Change
Q4
Real estate1 2,273 205
Loans and investments (held to maturity) 12,610 –622
Associates 553 131
Total off-balance-sheet reserves (gross) 15,436 –286
as if
Provision for deferred premium refunds –11,121 498
Deferred tax –1,314 –69
Minority interests –1 0
Shareholders' stake 3,001 144
Backup: Munich Re (Group) – Investments
139Analysts' conference 2016
Risk category Group RI/MH ERGO Div. Explanation
Year-end 2015 €bn 2014 2015 2015 2015 2015
Equity 3.4 3.7 3.0 0.7 0.0 Increase of net equity exposure
General interest rate 3.8 3.1 1.9 2.2 –1.0 Reduction in general interest-rate risk mainly at
ERGO due to favourable investment performance.
Full implementation of the SII methodology.Credit spread 3.1 3.5 1.6 2.8 –0.9
Real estate 1.3 1.5 0.9 0.6 0.0 Positive performance of real estate portfolio
Currency 3.5 3.5 3.3 0.2 0.0 No significant change in overall FX position
Simple sum 15.1 15.3 10.7 6.5 –1.9
Diversification –6.3 –6.6 –4.9 –2.2 –Slightly improved diversification due to more
balanced investment portfolio
Total SCR 8.8 8.7 5.8 4.3 –1.4
Stable market risk as a consequence of a balanced
investment portfolio
Backup: Risk management – Market risk
Slightly higher equity and real-estate risk offset by reduced overall interest-rate risk
140Analysts' conference 2016
220%
175%
140%
100%
Further improvement of Solvency II capitalisation ratio
SII ratioMunich Re actions
Capital repatriation Increased risk-taking Holding excess capital to meet
external constraints
>220%Above target capitalisation
Tolerate (management decision) or If necessary, take management action
(e.g. risk transfer, scaling-down of activities; raising of hybrid capital)
175% – 220%
Target capitalisation
140% – 175%Below target capitalisation
<140%: Sub-optimum capitalisation
Take risk-management action (e.g. risk transfer, scaling-down of activities; raising of hybrid capital) or
in exceptional cases, tolerate situation (management decision)
2009 2010 2011 2012 2013 2014 2015
%
Optimum level of capitalisation
302%
Backup: Risk management – Target capitalisation
Transition into
SII metric
141Analysts' conference 2016
Utilisation of opportunities in
alternative-capital retro markets
Expansion of nat cat protection via
indemnity retro, cat bonds and sidecar
200
400
600
800
1,000
1,200
1,400
US windstormnortheast
US windstormsoutheast
US earthquake EU windstorm EU other perils Japanearthquake
Australiacyclone
Cat bonds
Risk swaps
Sidecars
Indemnity retro
2016 protection (total)
0
Munich Re's maximum in-force nat cat protection
As at January 2016. Protection before reinstatement premiums.1 Earthquake Europe, including Turkey.
1
Backup: Risk management – Risk transfer
Retrocession use reflects favourable market terms
€mMunich Re's maximum in-force nat cat protection as at January 2016
142Analysts' conference 2016
Profit and loss attribution provides consistent reporting
of economic performance across business units
Munich Re (Group) 2015
€bnRI
LifeRI
P-C
ERGO Life/Health
Germany
ERGO P-C
GermanyERGO
Intl.MunichHealth
Munich Re(Group)
Operating economic earnings 1.5 1.7 –0.3 0.1 0.0 0.0 3.0
Expected return existing business 0.2 0.2 0.2 0.0 0.1 0.0 0.7
New business value 0.9 0.2 0.3 0.3 0.0 0.0 1.7
Operating variances existing business 0.2 1.3 –0.7 –0.2 0.0 0.0 0.6
Other operating variances 0.1 0.0 0.0 0.0 0.0 0.0 0.0
Economic effects 0.3 0.7 0.8 0.0 0.1 0.0 2.0
Other non-operating earnings 0.1 –0.1 0.5 –0.1 –0.1 0.0 0.3
Total economic earnings 1.8 2.3 1.1 0.1 0.1 0.0 5.3
Capital measures –2.5
Changes in other own funds items –0.1
Change in SII EOF 2.7
Backup: Solvency II – Profit and loss attribution by business unit
Positive economic earnings contribution from all business units –
But with differing underlying drivers
143Analysts' conference 2016
EOF 31.12.2014
Opening adjustments
Retrospective adjustments of own funds not
qualifying as changes of reporting period
EOF 01.01.2015
Opening balance for determination of overall
change in reporting period
Economicearnings
Economic performance of the period resulting
in OF change
Capitalmeasures
Dividend: €1.3bn
Share buy-back: €1.0bn and other1
Change in other own funds items
Development of non-available own funds
items and own funds for FCIIF and IORP2
EOF 31.12.2015
Closing balance subject to SII Day-1 reporting
Change in eligible own funds
Change in SII eligible own funds €bn
1 Changes in consolidation group. 2 Own funds for other financial sectors (financial, credit institutions and investment firms and institutions for occupational retirement provision).
Backup: Munich Re (Group) – Capitalisation – EOF change
38.2
–0.3
38.0
5.3
–2.5
–0.1
40.7
144Analysts' conference 2016
IFRS equity
Goodwill and intangible assets
Valuation adjustments
Surplus funds (‘free RfB’)
Excess of assets over liabilities
Subordinated liabilities1
Foreseeable dividends, distributions and own shares2
Restrictions3
Basic own funds
Ancillary own funds
Restrictions from tiering
Own funds for FCIIF and IORP4
Eligible own funds
31.0
–3.7
8.1
1.9
37.3
4.9
–1.1
–0.8
40.3
0.0
0.0
0.4
40.7
Reconciliation of IFRS equity to eligible own fundsBackup: Munich Re (Group) – Capitalisation – Reconciliation of IFRS equity to own funds
€bnReconciliation of IFRS equity to eligible own funds as at 31 December 2015
+6.3
1 Excluding accrued interest. 2 Foreseeable distributions from share buy-backs (–€0.3bn) and own shares (–€0.7bn). 3 Deduction of non-available own funds items of –€0.5bn (e.g. non-available surplus funds) and deduction of own funds from participations in other financial sectors. 4 Own funds for other financial sectors (financial, credit institutions and investment firms and institutions for occupational retirement provision).
145Analysts' conference 2016
From IFRS to Solvency II excess of assets over
liabilities 31.12.2015
€bn SII IFRS1 Comments
Goodwill and intangible assets 0.0 3.7 –3.7No recognition of goodwill
and intangible assets in SII–3.7
Surplus funds 0.0 –1.9 1.9Surplus funds (‘free RfB’) are own funds in SII
and are therefore not classified as liabilities1.9
Investments including loans, deposits with cedants, cash 243.5 233.5 10.1
Full fair values in SII lead to
higher balances
8.1
Subordinated liabilities –5.1 –4.4 –0.6
Net deferred tax assets/liabilities –3.5 –2.1 –1.4Different valuation methods produce
difference in deferred taxes
Other assets and other liabilities –6.3 –6.1 –0.2 e.g. different valuation of financial liabilites
Technical accounts
without surplus funds–191.4 –191.6 0.3
SII: Risk margin and additional policyholder
participation due to higher fair values of
assets are partly offset by reserve discounting
SII EAoL versus IFRS equity 37.3 31.0 6.3 +6.3
Backup: Munich Re (Group) – Capitalisation – Comparison SII and IFRS balance sheet
1 IFRS balances reflect reclassifications in order to facilitate comparison with IFRS equity / Eligible own funds reconciliation.
Fair values, risk margin and surplus funds are the main differences
146Analysts' conference 2016
Financial calendarBackup: Shareholder information
2016
27 April Annual General Meeting 2016, ICM – International Congress Centre Munich
10 May Quarterly statement as at 31 March 20161
9 August Half-year financial report as at 30 June 2016
9 November Quarterly statement as at 30 September 20161
1 Munich Re is adjusting its financial reporting format following an amendment to the regulations of the Frankfurt stock exchange.
The half-year financial reports and annual reports will remain unchanged. However, instead of issuing quarterly reports for the first
and third quarters, we will release reports in the new form of quarterly statements from 2016 onwards. We will continue to present
and explain the figures for each quarter in telephone conferences for analysts and journalists, and in press releases.
147Analysts' conference 2016
For information, please contact
Christian Becker-Hussong
Head of Investor & Rating Agency Relations
Tel.: +49 (89) 3891-3910
E-mail: cbecker-hussong@munichre.com
Thorsten Dzuba
Tel.: +49 (89) 3891-8030
E-mail: tdzuba@munichre.com
Christine Franziszi
Tel.: +49 (89) 3891-3875
E-mail: cfranziszi@munichre.com
Britta Hamberger
Tel.: +49 (89) 3891-3504
E-mail: bhamberger@munichre.com
Ralf Kleinschroth
Tel.: +49 (89) 3891-4559
E-mail: rkleinschroth@munichre.com
Andreas Silberhorn
Tel.: +49 (89) 3891-3366
E-mail: asilberhorn@munichre.com
Angelika Rings
Tel.: +49 (211) 4937-7483
E-mail: angelika.rings@ergo.de
Andreas Hoffmann
Tel.: +49 (211) 4937-1573
E-mail: andreas.hoffmann@ergo.de
Ingrid Grunwald
Tel.: +49 (89) 3891-3517
E-mail: igrunwald@munichre.com
Münchener Rückversicherungs-Gesellschaft | Investor & Rating Agency Relations | Königinstraße 107 | 80802 München, Germany
Fax: +49 (89) 3891-9888 | E-mail: IR@munichre.com | Internet: www.munichre.com
Investor Relations Team
Backup: Shareholder information
148Analysts' conference 2016
Disclaimer
This presentation contains forward-looking statements that are based on current assumptions
and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and
other factors could lead to material differences between the forward-looking statements given
here and the actual development, in particular the results, financial situation and performance
of our Company. The Company assumes no liability to update these forward-looking
statements or to make them conform to future events or developments.